On 1 January 2023, PAX Enterprises (PAXE) acquired an interest in Sombrero, as shown below. PAXE paid for the transaction with cash in the amount shown below and 500,000 shares of PAXE common stock (par value $1.00 per share).
	Percent interest acquired	55%
	Cash Paid	$3,093,000

At the time of the acquisition, Sombrero's book value was				16,970,000
On January 1, PAXE stock had a market value of $14.90 per share and there was no premium paid in this transaction. Any unallocated excess results from goodwill. Sombrero had the following balances on January 1, 2023.
		Book Value	Fair Value
	Land	$1,700,000	$2,630,000
	Buildings (10-year life remaining)	2,700,000	$3,490,000
	Equipment (5-yr life remaining)	3,700,000	$3,400,000

For internal reporting purposes, PAXE employed the equity method to account for this investment.

1. Based on PAXEs acquisition price, what is the implied fair value of Sombrero? Round your answer to the nearest $1,000. 3 points

3. Compute the amount of the Equity in Sombrero Income that PAXE would report in it's Income Statement for 2023. 5 points

4.Compute the balance in the Investment in Sombrero reported by PAXE just before consolidation. 5 points

2. Determine [1] goodwill/gain on bargain purchase and [2] the annual amortization amounts. Use the Q #2 sheet to answer this question. 12 points