Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $525,000. On January 3, 2019, the acquisition date, Saddler Corporation?s capital stock and retained earnings account balances were $500,000 and $100,000, respectively. The following values were determined for Saddler Corporation on the date of purchase:

Required:

A. Prepare the entry on the books of Pace Company to record its investment in Saddler Corporation.

B. Prepare a Computation and Allocation Schedule for the difference between book value and the value implied by the purchase price in the consolidated statements workpaper.

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Book Value $ 50,000 Fair Value $ 70,000 Inventory Other current assets Marketable securities Plant and equipment 100,000 125,000 330,000 300,000