Victor Ltd. is a publicly owned company and has 31 December year-end.On January 1, 2017, Victor Ltd. purchased 200 shares of the 1,000 outstanding common shares of Haley Company for $222,000 cash.Victor Ltd. has significant influence as a result of this acquisition, Haley Company had assets and liabilities as follows:

As of January 1, 2017

Book Value Fair Value

Assets not subject to depreciation

$333,000 $450,000

Assets subject to depreciation (net)

430,800 580,000

Liabilities

118,900 118,900

The difference between book value and fair value were related, respectively, to a land and equipment, which was estimated to have remaining 5 years of useful life and is depreciated using straight-line method.At the fiscal year end December 31, 2017, Haley Company reported net income of $87,000, and declared and paid total common dividends of $30,000.Goodwill was not impaired in 2017.

Required:

1. How much goodwill is inherent in the purchaseprice?(3 marks)
2. Give the appropriate entries for Victor Ltd. for the year2017.(7 marks)