Answer: $520,000
Explanation:
The amount of gain or goodwill is recognized by Dennis would be calculated as:
Book value of net asset = $3,800,000
Add: Increase in the fair value of Miles's tangible assets = $600,000
Add: Increase in the fair value of identifiable intangible assets = $320,000
Fair value of net asset = $4,720,000
Less: Cash paid for purchase = $4,200,000
Gain = $4,720,000 - $4,200,000
= $520,000
