Exercise 2-6 Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,372,120 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Current assets Plant and equipment Total Book value Fair value 1,016,860 $1,016,860 1,155,510 1,384,170 $2,172,370 $2,401,030 Liabilities $169,930 $231,530 524,810 603,000 874,630 $2,172,370 Common stock Other contributed capital Retained earnings Total As part of the negotiations, Pritano Company agreed to issue 9,360 additional shares of its $10 par value common stock to the stockholders of Succo if the average postcombination earnings over the next three years equaled or exceeded $2,598,000. The fair value of the contingent consideration on the date of acquisition was estimated to be $199,800. The contingent consideration (earnout) was classified as equity rather than as a liability