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    Goodwill

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    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?

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    https://brainmass.com/business/accounting/accounting-goodwill-246753

    Solution Summary

    The solution explains how to determine the amount of goodwill to be recognized on purchase

    $2.19

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