Business Acquisition Accounting Delta Ltd was incorporated on 1 July 2003 and acquired the business of Epsilon Corp. from 1 January 2003. The purchase price agreed was $700,000, payable on 30 September 2003, including $35,000 interest. Below is the profit and loss account for the year ending 31 December 2003:

Account	Amount
Sales	500,000
Cost of goods sold	300,000
Gross profit	200,000
Wages and salaries	70,000
Rent	20,000
Distribution expenses	15,000
Interest paid to vendors	35,000
Depreciation	10,000
Miscellaneous expenses	10,000
Net profit	40,000

Required: a. Allocate profits between pre- and post-incorporation periods. b. Record the journal entries for the purchase. c. Determine the value of goodwill.