Francisco Inc. acquired 100 percent of the voting shares of Beltran Company on January 1, 2012. In exchange, Francisco paid $450,000 in cash and issued 104,000 shares of its own $1 par value common stock. On this date, Francisco's stock had a fair value of $12 per share. The combination is a statutory merger with Beltran subsequently dissolved as a legal corporation. Beltrana'ss assets and liabilities are assigned to a new reporting unit.

The following reports the fair values for the Beltran reporting unit for January 1, 2012, and December 31, 2013, along with their respective book values on December 31, 2013.

Beltran Reporting Unit	Fair Values 1/1/12	Fair Values 12/31/13	Book Values 12/31/13
Cash	$75,000	$50,000	$50,000
Receivables	$193,000	$225,000	$225,000
Inventory	$281,000	$305,000	$300,000
Patents	$525,000	$600,000	$500,000
Customer relationships	$500,000	$480,000	$450,000
Equipment (net)	$295,000	$240,000	$235,000
Goodwill	?	?	$400,000
Accounts Payable	($121,000)	($175,000)	($175,000)
Long-term liabilities	($450,000)	($400,000)	($400,000)

• a. Prepare Francisco