Calculate the amount paid for goodwill

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Problem - The XYZ Company has purchased all of the outstanding common stock of Company 123 for $25,000,000 in cash.

The book value of Company 123's net assets (assets minus liabilities) was $16,250,000.

The fair values of all of Company 123's assets and liabilities were equal to their book values with the following exceptions,

                                                         Book Value          Fair Value

Receivables                                        $3,000,000          $2,850,000

Property, plant, and equipment             10,200,000          11,200,000

Intangible assets                                 30,000                3,000,000

Please calculate the amount paid for goodwill?

Reference no: EM131773665

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