Exercise 5-3

Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $533,100. On January 3, 2014, the acquisition date, Saddler Corporations capital stock and retained earnings account balances were $500,000 and $101,400, respectively. The following values were determined for Saddler Corporation on the date of purchase:

		Book Value		Fair Value
Inventory		$50,600		$68,800
Other current assets		197,800		197,800
Marketable securities		100,100		125,300
Plant and equipment		305,900		330,200

(a)

Prepare a Computation and Allocation Schedule for the difference between book value and the value implied by the purchase price in the consolidated statements workpaper.