Alexander paid $148,000 to acquire 100% of Willis Corporation in a statutory merger. Alexander also agreed to pay the shareholders of Willis $0.80 in cash for every dollar in income from continuing operations of the combined entity over $75,000 in the first year following acquisition. Alexander projects that there is a 10% (45%, 25%, 20%) probability that the income from continuing operations for the year is $65,000 ($75,000, $85,000, $95,000 respectively). Alexander uses a discount rate of 8%.

Information for Willis Corporation immediately before the merger was as follows:

Book ValueFair Value

Current Assets$40,000$50,000

Plant Assets$120,000$70,000

Liabilities$50,000$45,000

Previously unreported items identified as belonging to Willis:

Fair Value

Contracts under negotiation with potential customers$15,000

Customer contracts for consulting projects$7,000

In-process research and development$8,000

Skilled workforce$23,000

Recent favorable press reports on Willis$2,000

Proprietary databases$12,000

Determine the goodwill to be reported in this acquisition.