On January 1, 2014, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Palomaprovided a reasonable basis for assessing the total January 1, 2014, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners equity amounts in its balance sheet:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$400,000

Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . .60,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .265,000

725000

In determining its acquisition offer, Paloma noted that the values for San Marcos recorded assets and liabilities approximated their fair values. Paloma also observed that San Marco had developed internally a customer base with an assessed fair value of $800,000that was not reflected on San Marcos books. Paloma expected both cost and revenue synergies from the combination.

At the acquisition date, Paloma prepared the following fair-value allocation schedule:

Fair value of San Marco Company. . . . . . . . . . . . . . . . . . . . . . . . $1,900,000

Book value of San Marco Company . . . . . . . . . . . . . . . . . . . . . .725,000

Excess fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,175,000

to customer base (10-year remaining life) . . . . . . . . . . . . . . . . . .800,000

to goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 375,000

At December 31, 2015, the two companies report the following balances:

Accounts	Paloma	San Marco
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-1,843,000	-675,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . .	1,100,000	322,000
Depreciation expense . . . . . . . . . . . . . . . . . . . . . .	125,000	120,000
Amortization expense . . . . . . . . . . . . . . . . . . . . . .	275,000	11,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . .	27,500	7,000
Equity in income of San Marco . . . . . . . . . . . . . . .	-121,500	0
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-437,000	-215,000
Retained earnings, 1/1 . . .	-2,625,000	-395,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-437,000	-215,000
Dividends declared . . . . . . . . . . . . . . . . . . . . . . . .	350,000	25,000
Retained earnings, 12/31. . . . . . . . . . . . . . . . . . . .	-2,712,000	-585,000
Current assets. . . . .	1,204,000	430,000
Investment in San Marco. . . . . . . . . . . . . . . . . . . .	1,854,000	0
Buildings and equipment . . . . . . . . . . . . . . . . . . . .	931,000	863,000
Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	950,000	107,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,939,000	1,400,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .	-485,000	-200,000
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-542,000	-155,000
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . .	-900,000	-400,000
Additional paid-in capital . . . . . . . . . . . . . . . . . .	-300,000	-60,000
Retained earnings, 12/31 . . . . . . . . . . . . . . . . . . .	-2,712,000	-585,000
Total liabilities and equities . . . . . . . . . . . . . . . . . .	-4,939,000	-1,400,000

At year-end, there were no intra-entity receivables or payables.

Calculate good well or Gain on bargain purchase

Recorded Journal entries on internal Paloma recodes related to, 2015year?

If the Paloma uses the equity method, what consolidation entries would be used on a 2015 worksheet?

Determine the consolidated balances for this business combination as of December 31, 2015?