Sierra has acquired several companies. Assume that Sierra purchased Outdoors Unlimited for $6,000,000 cash. The book value

Question:

Sierra has acquired several companies. Assume that Sierra purchased Outdoors Unlimited for $6,000,000 cash. The book value of Outdoors Unlimited’s assets is $12,000,000 (fair value, $15,000,000), and it has liabilities of $11,000,000 (fair value, $11,000,000).


Requirements 

1. Compute the cost of the goodwill purchased by Sierra. 

2. Record the purchase of Outdoors Unlimited by Sierra.  

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