Following are selected accounts for Mergaronite Company and Hill, Inc., as of December 31, 2013. Several of Mergaronites accounts have been omitted. Credit balances are indicated by parenthesis.

Mergaronite

Revenues $(600,000)

Cost of Goods sold $280,000

Depreciation Expense $120,000

Investment Income not given

Retained earnings 1/1/13(900,000)

Dividends paid $130,000

Current assets $200,000

Land $300,000

Buildings (net) $500,000

Equipment (net) $200,000

Liabilities $(400,000)

Common Stock $(300,000)

Additional Paid-In Capital $(50,000)

Hill

Revenues $(250,000)

Cost of Goods sold $100,000

Depreciation Expense $50,000

Investment Income n/a

Retained earnings 1/1/13 $(600,000)

Dividends paid $40,000

Current assets $690,000

Land $90,000

Buildings (net)$140,000

Equipment (net) $250,000

Liabilities $(310,000)

Common Stock $(40,000)

Additional Paid-In Capital $(160,000)

Assume that Mergaronite took over Hill on January 1,2009 by issuing 7,000 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2009 Hills land was undervalued by $20,000, its buildings were overvalued by $20,000 and equipment was undervalued by $60,000. The buildings had a 10-year life; the equipment had a 5-year life. A customer list with an appraised value of $100,000 was developed internally by Hill and was to be written off over a 20-year period.