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Composite Company is considering purchasing EKC Company. EKC's balance sheet at December 31, Year 1,...

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Accounting

Composite Company is considering purchasing EKC Company. EKC's balance sheet at December 31, Year 1, is as follows:
Cash $46,000 Current liabilities $65,000
Accounts receivable 73,000 Bonds payable 250,000
Inventory 120,000 Common stock 325,000
Property, plant, and equipment (net)610,000 Retained earnings 209,000
$849,000 $849,000
On December 31, Year 1, Composite discovered the following about EKC:
No allowance for uncollectible accounts has been established. An allowance of $4,200 is considered appropriate.
The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Composite. The FIFO inventory valuation of the December 31, Year 1, ending inventory would be $188,000.
The fair value of the property, plant, and equipment (net) is $710,000.
The company has an unrecorded patent that is worth $100,000.
The book values of the current liabilities and bonds payable are the same as their market values.
Compute the value of the goodwill if Composite pays $1,212,800 for EKC.

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