Pritano Company acquired all the net assets of Succo Company on December 31, 2010, for $2,160,000 cash. The balance sheet of Succo Company immediately prior to the acquisition showed:

As part of the negotiations, Pritano agreed to pay the stockholders of Succo $360,000 cash if the postcombination earnings of Pritano averaged $2,160,000 or more per year over the next two years.

Required:
Prepare the journal entries on the books of Pritano to record the acquisition on December 31, 2010. It is expected that the earnings target is likely to bemet.

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Book value Fair walue 960,000 960,000 1,080,000 Current assets Plant and equipment Total Liabilities Common stock Other contributed capital Retained earnings Total 1,440,000 $2,040,000 $2,400,000 216,000 华180.000 480,000 600,000 780,000 $2,040,000