BigNet acquires 100% of Smallport by paying $2,600,000 cash. At the date of acquisition, Smallport had the following book values and fair values for its balance sheet assets and liabilities:

Assets:		Book Value	Fair Value
Current Assets		$300,000	$300,000
Computer equipment		$400,000	$600,000
Software		$100,000	$1,200,000
Customer Lists		$0	$700,000
Liabilities:
Notes Payable		$200,000	$250,000
Stockholders Equity
Common Stock		$120,000
Retained Earnings		$480,000

Required:

a. Estimate the fair value of net assets of Smallport

b. Estimate the goodwill that BigNet would record after the acquisition of Smallport

c. Write the financial statement effects in the books of BigNet.