Goodwill (Learning Objective 6) 10–15 min.

Rauscher, Corp., aggressively acquires other companies. Assume that Rauscher, Corp., purchased Lancer, Inc., for $12 million cash. The market value of Lancer’s assets is $14 million, and it has liabilities with a market value of $3.5 million.

Requirements 1. Compute the cost of goodwill purchased by Rauscher, Corp.

2. Record the purchase of Lancer, Inc., by Rauscher, Corp.

AppendixLO1