On January 1, 2018, Pac Co. issued 50,000 shares of its $1 par value common stock for all of Man Companys outstanding common stock. Pacs common stock has a $30 per share fair value at the date of the transaction. On the acquisition date, Man reported total equity of $850,000. The book values of Mans reported net assets on the acquisition date approximated their fair values, except for intangible assets that were undervalued by $100,000. The transaction was a taxable transaction under the Internal Revenue Code. As part of the acquisition, Pac contracts with the selling Man Co. stockholders to pay (on March 1, 2019) additional $300,000 in cash if 2018 consolidated net income is greater than $650,000. The fair value of this provision is $80,000 on January 1, 2018. The following costs in relation to the acquisition were incurred by Pac on January 1, 2018: (1) Printers and underwriting fees in relation to the common stock issued of $9,000 and (2) Finders and due diligence fees to affect the business combination of $25,000. The 2018 consolidated net income, excluding the effect of contingent consideration and all the costs in relation to the acquisition, was $950,000.

Show your work.

1. Determine the amount of goodwill that should be reported on the Pacs consolidated balance sheet immediately after this business combination

2. Determine the amount of net income that should be reported in Pacs consolidated statement of income on December 31, 2018 and ignore income tax effects