Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $12,000,000 in cash. The book values and fair values of Premium Meats' assets and liabilities were: Book Value Fair Value Accounts Receivable $ 1,800,000 $ 1,600,000 Equipment 8,500,000 9,900,000 Patents 300,000 1,700,000 Notes Payable (2,700,000) (2,700,000) Net assets $ 7,900,000 $ 10,500,000
Required:
1. Calculate the amount Fresh Cut should report for goodwill. (Enter your answer in millions rounded to 1 decimal place. (i. e., $5,500,000 should be entered as 5.5).)
2. Record Fresh Cut's acquisition of Premium Meats. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i. e., 5,500,000 should be entered as 5.5).)
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