The balance sheets of Peugeot Ltd. and Sorento Ltd. on December 30, 2021 were as follows. Peugeot Sorento Ltd

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The balance sheets of Peugeot Ltd. and Sorento Ltd. on December
30, 2021 were as follows.
Peugeot
Sorento Ltd Fair Value
Cash and receivable


$ 96,000
$
25,000
$22,000
Inventory

87,000
40,000
38,000
Plant assets
(net)
198,000

75,000
70,000
Intangible
assets

24,000
10,000
8,000
$405,000
$150,000
Current
liabilities
$ 73,000
$
30,000
$35,000
Long-term
debt


87,500

60,000
57,000
Common
Stock

135,000
100,000
Retained Earnings (Deficit)

109,500
(40,000)
$405,000
$150,000
On December 31, 2021, Peugeot issued 3,000 shares, with a fair
market value (FMV) of $25.00 each, plus $10,000 long term debt for
all of the outstanding shares of Sorento Ltd.
Costs involved in the acquisition, paid in cash, were as
follows.
Costs of arranging the acquisition (legal
costs)

$4,000
Costs of issuing
shares

2,000
$6,000
Peugeot Ltd. was identified as the acquirer in the
combination.
REQUIRED:
a) Calculate and
allocate the Acquisition Differential to determine the value of
goodwill to be recorded on the consolidated Balance Sheet.
Use the entity theory for calculations.
Note: You are not required to prepare a
Consolidated Balance Sheet.