JMR Inc. just purchased 85% of ASJ Ltd. for $840,000 cash. All of ASJs net

identifiable assets of $625,000 are equal to their fair values except for the following:

i) Machinery and equipment with a book value of $625,000 and a fair value of

$125,000 in excess of book value.

ii) ASJ has a patent, not currently on its books. The cash flows from the patent

are expected to be $40,000 per year for the next 8 years, and JMR believes

that 5% is an adequate discount rate.

JMR has determined that it will calculate any non-controlling interest based on its

proportionate share of ASJs fair value.

What should be recorded as the fair value of ASJs assets acquired by JMR (rounded

to the nearest thousand dollars)?