ACCOUNTING-Johnson Corporation acquired all of the outstanding common stock

QUESTION

Johnson Corporation acquired 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 value of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair ValueRecievables $1,300,000 $1,100,000Property, Plant, and Equipment 8,000,000 9,400,000Intangible assets 200,000 1,200,000Required:Calculate the amount paid for goodwill.

ANSWER:

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