On May 1, Donovan Company reported the following account balances: Current assets Buildings & equipment (net) Total assets Liabilities Common stock Retained earnings Total liabilities and equities $ 114,500 223,000 $ 337,500 $ 64,500 150,000 123,000 $ 337,500 On May 1, Beasley paid $451,800 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $17,000 in accounts payable for legal and accounting fees. Beasley also agreed to pay $82,900 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $21,100. In determining its offer, Beasley noted the following: