(Exercise 5.3) The condensed balance sheet of Geo Company on March 31, 2005, is shown below: CHECK FIGURE Amount of goodwill, $10,000. Cash Other current assets Plant assets (net) Total assets GEO COMPANY Balance Sheet (prior to business combination) March 31, 2005 Assets $ 20,000 140,000 740,000 $900,000 Liabilities and Stockholders' Equity $ 80,000 200,000 180,000 120,000 320,000 $900,000 Current liabilities Long-term debt Common stock, $2 par Additional paid-in capital Retained earnings Total liabilities and stockholders' equity On March 31, 2005, Master Corporation paid $700,000 cash for all the net assets of Geo (except cash) in a business combination. The carrying amounts of Geo's other current as- sets and current liabilities were the same as their current fair values. However, current fair values of Geo's plant assets and long-term debt were $920,000 and $190,000, respectively. Also on March 31, Master paid the following direct out-of-pocket costs for the business combination with Geo: Legal fees Finder's fee CPA firm's fee for audit of Geo Company's March 31, 2005, financial statements Total out-of-pocket costs of business combination $ 10,000 70,000 20,000 $100,000 Prepare a working paper to compute the amount of goodwill or bargain-purchase excess in the business combination of Master Corporation and Geo Company on March 31, 2005. (Disregard income taxes.)