Asset acquisition (fair value is different from book value)

The following financial statement information is for an investor company and an investee company on January 1, 2013. On January 1, 2013, the investor company's common stock had a traded market value of $10.5 per share, and the investee company's common stock had a traded market value of $19 per share.

Book ValuesFair Values InvestorInvesteeInvestorInvestee Receivables & inventories $60,000 $30,000 $54,000 $27,000 Land 120,000 60,000 180,000 90,000 Property & equipment 135,000 60,000 150,000 78,000 Trademarks & patents _ _ 90,000 48,000 Total assets $315,000 $150,000 $474,000 $243,000 Liabilities $90,000 $48,000 $108,000 $57,000 Common stock ($1 par) 18,000 10,000 Additional paid-in capital 162,000 86,000 Retained earnings 45,000 6,000 Total liabilities & equity $315,000 $150,000 Net assets $225,000 $102,000 $366,000 $186,000

Assume that the investor company issued 18,000 new shares of the investor company's common stock in exchange for all of the individually identifiable assets and liabilities of the investee company, in a transaction that qualifies as a business combination. The financial information presented, above, was prepared immediately before this transaction. Provide the Investor Company's balance (i.e., on the investor's books, before consolidation) for "Goodwill" immediately following the acquisition of the investee's net assets:

$0

$39,000

$3,000

$87,000