On January 1, 2005, Petrel, Inc. purchased 70% of the outstanding voting common stock of Ocean, Inc., for $2,600,000. The book value of Oceans net equity on that date was $3,100,000. Book values were equal to fair values except as follows:

		Book		Fair
Assets & Liabilities		Values		Values		Difference
Equipment		$250,000		$190,000		($60,000)
Building		600,000		700,000		100,000
Notes Payables		270,000		240,000		(30,000)
		$1,120,000		$1,130,000		$10,000