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    Purchase Accounting Method

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    Johnson, Inc. has $4.2 million in net working capital. The firm has fixed assets with a book value of $48.6 million and a market value of $53.4 million. Vandy & Sons is buying Johnson, Inc. for $60 million in cash. The acquisition will be recorded using the purchase accounting method. What is the amount of goodwill that Vandy & Sons will record on its balance sheet as a result of this acquisition?

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