Jaynes Inc. acquired all of Aaron Co.'s common stock on January 1, 2010, by issuing 11,000 shares of $1 par value common stock. Jaynes's shares had a $17 per share fair value. On that date, Aaron reported a net book value of $120,000. However, its equipment (with a five-year remaining life) was undervalued by $6,000 in the company's accounting records. Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years.

The following figures came from the individual accounting records of these two companies as of December 31, 2010:

laynes Inc. Aaron Co. Revenues $ 840,000 $ 336,000 Expenses 552,000 180,000 Investment income Not given Dividends paid 110,000 50,000 Equipment 600,000 360,000 Retained earnings 12/31/11 balance 960,000 216,000lames Inc. Revenues $ 720.000 Expenses 528.000 Investments income Not given Dividends paid 100.000 Aaron Co. $ 276.000 144.000 60.000