Pilgrim, Inc., has acquired several other companies. Assume that Pilgrim purchased Kate, Co., for \($9\) million cash. The book value of Kate’s assets is \($15\) million (market value, \($18\) million), and it has liabilities of \($13\) million.
Requirements
1. Compute the cost of the goodwill purchased by Pilgrim.
2. Record the purchase of Kate by Pilgrim.