Answer:
the amount paid for goodwill is $4,400,000
Explanation:
Goodwill is the <em>excess</em> of the purchase price over assets and liabilities acquired in a business combination agreement.
Transfer of Assets and Liabilities is done at their fair values thus consider the fair values for calculation of goodwill.
Please Note : There is no Non-controlling interest as all outstanding common stock of Barney Corporation were acquired by Wolfson Corporation.
<u>Journal for Acquisition</u>
Current Assets $ 8,500,000 (debit)
Property, plant, and equipment 15,000,000 (debit)
Other assets $1,600,000 (debit)
Goodwill (<em>Balancing figure)</em> $4,400,000 (debit)
Current liabilities $5,000,000 (credit)
Long-term liabilities $6,500,000 (credit)
Cash - Purchase Price $18,000,000 (credit)
