Two Hollywood companies had the following balance sheet accounts as of December 31, 20X7 ($ in millions):

	Lexia	Hudson Productions		Lexia	Hudson Productions
Cash & receivables	$60	$44	Current liabilities	$100	$40
Inventories	240	6	Common stock	200	20
Plant assets, net	$300	190	Retained earnings	300	180
Total assets	$600	$240	Total liabilities & stock eq.	$600	$240
Net income for 20X7	$38	$8

On January 4, 20X8, these entities combined. Lexia issued $360 million of its shares (at market value) in exchange for all shares of Hudson, a motion picture division of a large company. The inventory of films acquired through the combination had been fully amortized on Hudsons books.

During 20X8, Hudson received revenue of $42 million from the rental of films from its inventory. Lexia earned $40 million on its other operations (i.e., excluding Hudson) during 20X8. Hudson broke even on its other operations (i.e., excluding the film rental contracts during 20X8.

Prepare a consolidated balance sheet for the combined company immediately after the combination.Assume $160 million of the purchase price was assigned to the inventory of films.The fair values of all other Hudson assets and liabilities were equal to their book values.

Prepare a comparison of Lexias consolidated net income between 20X7 and 20X8, where the cost of the film inventories would be amortized on a straight-line basis over 4 years.What would be the net income for 20X8 if the $160 million were assigned to goodwill instead of the inventory of films and goodwill was not amortized?