Doug Corporation purchased Leslie Company's entire business for $3,200,000. The fair market value of Leslie's net identifiable assets is $2,900,000.
There is no question here. There is also no subject area here.
It is, however, a fascinating piece of information.
To determine the amount paid for goodwill in this scenario, you need to know the purchase price and the fair market value of the net identifiable assets.
Goodwill can be calculated as:
Goodwill = Purchase price - Fair market value of net identifiable assets
In this case, the purchase price is $3,200,000 and the fair market value of the net identifiable assets is $2,900,000.
Therefore, the goodwill can be calculated as:
Goodwill = $3,200,000 - $2,900,000
Goodwill = $300,000
So, in the purchase of Leslie Company's business, Doug Corporation paid a goodwill amount of $300,000.