Marino Company had the following balance sheet on January 1, 2019:

Marino Company

Balance Sheet

January 1, 2019

1

Cash

$20,000.00

Accounts payable

$30,000.00

2

Inventory

30,000.00

Notes payable

150,000.00

3

Property, plant, and equipment

200,000.00

4

Patent

20,000.00

Shareholders' equity

90,000.00

5

$270,000.00

$270,000.00

On January 1, 2019, Paul Company purchased Marino by acquiring all its outstanding shares for $300,000 cash. On that date, the fair value of the inventory was $10,000, and the fair value of the equipment was $230,000. In addition, the fair value of a previously unrecorded customer list was $25,000. For all other amounts, the book value of January 1, 2019, equaled fair value.

Required:

1. Compute the goodwill associated with the purchase of Marino.2. Prepare the journal entry necessary on January 1, 2019, to record the acquisition of Marino.