Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $11,840,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $8,500,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions:
Book Value Fair Value
Receivables $ 2,000,000 $ 1,730,000
Property, plant, and equipment 8,700,000 10,170,000
Intangible assets 270,000 1,340,000
Required:
Calculate the amount paid for goodwill.
