Chapter 6, Problem 6.5ME

Mini-Exercise 6.5

LO 9

Goodwill Backstreets Co. recently acquired all of Jungleland, Inc.’s net assets in a business acquisition. The cash purchase price was $12.6 million. Jungleland, Inc.’s assets and liabilities had the following appraised values immediately prior to the acquisition: land, $2.4 million; buildings, $5.8 million; inventory, $3.4 million; long-term notes payable, for which Backstreets Co. assumes payment responsibilities, $2.5 million.

Required:

How much goodwill will result from this transaction?