Marino Company

Balance Sheet

January 1, 2016

1

Cash

$10,000.00

Accounts payable

$30,000.00

2

Inventory

40,000.00

Notes payable

100,000.00

3

Property, plant, and equipment

200,000.00

4

Patent

20,000.00

Shareholders equity

140,000.00

5

$270,000.00

On January 1, 2016, Paul Company purchased Marino by acquiring all its outstanding shares for $300,000 cash. On that date, the fair value of the inventory was $30,000, and the fair value of the equipment was $240,000. In addition, the fair value of a previously unrecorded customer list was $25,000. For all other amounts, the book value of January 1, 2016, equaled fair value.

Required:

1.	Compute the goodwill associated with the purchase of Marino.
2.	Prepare the journal entry necessary on January 1, 2016, to record the acquisition of Marino.

$270,000.00