On June 1, 2003, Pi Company acquired all of the net assets of Sigma Company for $120,000 cash. The two companies merged with Pi Company surviving. The balance sheets for each company prior to the merger follow.

Required: 1. How much goodwill was involved in this merger? Show computations. 2. Record the merger by Pi Company on June 1, 2003. 3. Prepare a consolidated balance sheet immediately after the acquisition.

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Pi Balance Sheets at June 1, 2003 Cash Property and equipment (net) Total assets Company $146,000 352,000 $498,000 Liabilities $ 93,000 Common stock (par $1) 220,000 Sigma Company $ 13,000 165,000* $178,000 $ 82,000 65,000 Retained earnings 185,000 31,000 Total liabilities and stockholders' equity $498,000 $178,000