Sheridian Homes Company is considering the acquisition of Pina, Inc. early in $2025.$ To assess the amount, it might be willing to pay, Sheridian Homes makes the following computations and assumptions.

A$.$ Pina, Inc. has identifiable assets with a total fair value of $$15,009,000$ and liabilities of $$8,814,000.$ The assets include office equipment with a fair value approximating book value, buildings with a fair value $30\%$ higher than book value, and land with a fair value $75\%$ higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Pina, Inc.

B$.$ Pina, Inc.$\text{'}$s incomes for the years $2022$ through $2024$ were $$1,201,100,1,500,800,$ and $$952,400,$ respectively. Sheridian Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax earnings:

Depreciation on buildings $($each year$)960,600$

Depreciation on equipment $($each year$)50,100$

Extraordinary loss $($year $2024)303,000$

Sales commissions $($each year$)254,500$

C$.$ The normal rate or return on net assets for the industry is $15\%.$

$($a$)$ Assume Further that Sheridian Homes feels that it must earn a $25\%$ return on its investment and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculated a reasonable offering price for Pina, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. $($round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}215125$ and final answers to $0$ decimal places e$.$g$.58,971.)$

Goodwill $

Offering price $

$($b$)$ Assume that Sheridan Homes feels that it must earn a $15\%$ return on its investment, but that average excess earnings are to be capitalized for three years only. Based on these assumptions, calculated a reasonable offering price for Pina, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. $($round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}215125$ and final answers to $0$ decimal places e$.$g$.58,971.)$

Goodwill $

Offering price $