1.On December 31,Year 1,Damon purchased 100%of the outstanding common stock of Smith Co. in a business combination by issuing 20,000 shares of its $1par common stock (fair value $14 per share), and paying cash of $30,000. Damon also incurred $23,000 in direct acquisition costs for due diligence professional services.

On the acquisition date, the following amounts are relevant to Smith Co.:

Book value

Fair value

Assets

$140,000

$414,000

Liabilities

-75,000

-67,000

Ignoring income tax effects, what is the total effect of the acquisition transaction, including the related financing transaction, on the Year 1 net income reported by Damon Co. on its consolidated income statement?(Enter a gain as a positive number and a loss as a negative number.)