On January 4, 2004. Penn Company acquired all 8,000 outstanding shares of Syracuse Company for

$12 cash per share. Immediately after the acquisition, the balance sheets reflected the following:

Required: 1. Give the journal entry that Penn Company made to record the acquisition. 2. Analyze the acquisition to determine the amount of goodwill purchased. 3. Should Syracuse Company's assets be included on the consolidated balance sheet at book value or market value? Explain. 4. Prepare a consolidated balance sheet immediately after acquisition. (Hint: Consider your answer to requirement [3].)

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Balance Sheets at January 4, 2004 Penn Company Syracuse Company Cash Investment in Syracuse Company $ 22,000 $23,000 96,000 Property and equipment (net) Total assets Liabilities 132,000 65,000* $250,000 $88,000 $ 27,000 $12,000 Common stock (par $5) 120,000 40,000 Retained earnings 103,000 36,000 Total liabilities and stockholders' equity $250,000 $88,000