On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows:

	Park				Strand
Current assets	$	102,250			$	20,150
Noncurrent assets		100,500				42,600
Total assets	$	202,750			$	62,750
Current liabilities	$	52,000			$	12,750
Long-term debt		66,750
Stockholders' equity		84,000				50,000
Total liabilities and equities	$	202,750			$	62,750

On January 2, Park borrowed $60,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strands total fair value. The $60,400 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent).