On January 4, 2011, Penn Company acquired all 8,000 outstanding shares of Syracuse Company for $12 cash per share. Immediately after the acquisition, the balance sheets reflected the following:

Required:
1. Give the journal entry that Penn Company made to record the acquisition.
2. Analyze the acquisition to determine the amount of goodwill purchased.
3. Should Syracuse Company's assets be included on the consolidated balance sheet at book value or market value? Explain.
4. Prepare a consolidated balance sheet immediately after acquisition.

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Balance Sheets at January 4. 2011 Cash Investment in Syracuse Company Property and equipment (net) Penn Company Svracuse Company S 22,000 $23,000 96,000 65,000 $88,000 132,000 Total assets $250,000 S 27.000 120,000 103,000 $250,000 $12.000 40,000 36,000 $88,000 Liabilities Common stock (par $5) Retained earnings Total liabilities and stockholders' equity *Determined by Penn Company to have a market value of $72,000 at date of acquisition.