Problem:
Distributor Company purchases Supplier Company for $800,000 cash on January 1, 2007. The book value of Supplier Company's net assets, as reflected on its December 31, 2006 balance sheet is $620,000. An analysis by Distributor on December 31, 2006 indicates that the fair value of Supplier's tangible assets exceeded the book value by $60,000, and the fair value of identifiable intangible assets exceeded book value by $45,000. How much goodwill should be recognized by Distributor Company when recording the purchase of Supplier Company?