Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid $856,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $214,000 both before and after Millers acquisition.

On January 1, 2016, Taylor reported a book value of $752,000 (Common Stock = $376,000; Additional Paid-In Capital = $112,800; Retained Earnings = $263,200). Several of Taylors buildings that had a remaining life of 20 years were undervalued by a total of $100,300.

During the next three years, Taylor reports income and declares dividends as follows:

Year	Net Income			Dividends
2016	$	87,800		$	12,500
2017		112,500			18,800
2018		125,300			25,100

Determine the appropriate answers for each of the following questions:

1. What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years following this acquisition?

2. If a consolidated balance sheet is prepared as of January 1, 2016, what amount of goodwill should be recognized?