The following is a summary of the statement of financial position of Renew Company showing data regarding the carrying values and fair values as at December 31, 2019:

Book ValueFair Value

Cash1,657,500 1,657,500

Accounts Receivable1,781,2501,781,250

Merchandise Inventory180,000315,000

Land 140,625281,250

Buildings & Machinery, net 703,125 1,406,250

Total Assets4,462,5005,441,250

Trade & Other Payables28,12528,125

Long-term Liabilities 450,000337,500

Ordinary Share Capital 3,421,875

Share Premium 196,875

Accumulated Profits 365,625

Total Liabilities & Equity4,462,500

On January 1, 2020, Restore Company (acquirer) entered into a business combination by purchasing the assets and assuming the liabilities of Renew Company (the acquired company) in which Renew will cease to exist. Restore's consideration transferred consists of the following:

a.Issuance of 60,750 unissued shares of its $60 par value share capital. As of this date, the shares of Restore were selling at $75 per share;

b.$1,882,500 in long-term 14% notes payable; and

c.A contingent payment of $637,500 on January 1, 2022, if the average income of Renew during the next two years exceeded $1,500,000 per year. Restore estimates that there is a 90% probability that such payment will be required.

Required:

1.How much was the total fair value of the consideration given by Restore to acquire the net assets of Renew?

2.How much should be recognized by Restore as Goodwill as a result of the said business combination?