Question - Johnson Corporation purchased all of the outstanding common stock of Smith Corporation for $11,000,000 in cash. The book value of Smith's net assets (assets minus liabilities) was $7,800,000. The fair values of all of Smith's assets and liabilities were equal to their book values with the following exceptions:
|
|
Book Value
|
Fair Value
|
|
Receivables
|
$1,300,000
|
$1,100,000
|
|
Property, plant, and equipment
|
8,000,000
|
9,400,000
|
|
Intangible assets
|
200,000
|
1,200,000
|
Required: Calculate the amount paid for goodwill.