Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of the net assets purchased equals $1,800,000.
1. What is the amount of goodwill that Robinson records at the purchase date?
2. Does Robinson amortize goodwill at year-end for financial reporting purposes? If so, over how many years is it amortized?
3. Robinson believes that its employees provide superior customer service, and through their efforts, Robinson believes it has created $900,000 of goodwill. Should Robinson Company record this goodwill?