Answer:
The amount paid for goodwill is $3,000,000
Explanation:
For computing the goodwill amount, first we have to find out the net assets value based on fair values which is shown below:
Net asset = Total assets - Total liabilities
where,
Total assets = Current assets + Property, plant, and equipment + Other assets
= $14,000,000 + $36,000,000 + $4,000,000
= $54,000,000
And, the total liabilities = Current liabilities + Long-term liabilities
= $7,400,000 + $11,600,000
= $19,000,000
Now put these values to the above formula
So, the value would be equal to
= $54,000,000 - $19,000,000
= $38,000,000
Now the goodwill would be
= Amount paid - Net assets
= $38,000,000 - $35,000,000
= $3,000,000
