Amber Corporation (Amber), a public corporation, has concluded negotiations with Beryl Corporation (Beryl) for the purchase of all of Beryl's net assets at fair value, effective January 1, 20X7. An examination at that date by independent experts disclosed that the fair value of Beryl's inventories was $250,000; the fair value of its machinery and equipment was $370,000.

Additional Information:

â–  The fair value of the patent was $77,000. The values of the accounts receivable and of the current and long-term liabilities were equal to their carrying value.

â–  The purchase agreement stated that the purchase price of all the net assets will be $582,000 payable in cash.

â–  Both corporations have December 31 year-ends. The statements of financial position of both corporations, as at the date of the implementation of the purchase agreement (January 1, 20X7), are as follows:

Required
a. Calculate the goodwill arising from the business combination.

b. Prepare Amber's SFP at January 1, 20X7, after its acquisition of Beryl's net assets.

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Amber Corp. Beryl Corp. $ 800,000 Cash $100,000 Accounts receivable 275,000 250,000 250,000 200,000 Inventories at cost Machinery and equipment (net) 450,000 250,000 55,000 $855,000 Patent TOTAL ASSETS $1,775,000 Current liabilities 120,000 75,000 Long-term liabilities Capital-common shares Retained earnings 555,000 350,000 200,000 100,000 945,000 285,000 $1,775,000 $855,000 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY