08-3, 8-6 Computing Goodwill from the Purchase of a Business and Related Depreciation and Amortization (P8-7) The notes to a recent annual report from Lakshmi Financial Services Corporation indicated that the company acquired another company, Sanjeev Insurance Company. Assume that Lakshmi finalized the purchase of Sanjeev on January 2 of the current year. Lakshmi acquired all of Sanjeev's assets and assumed Sanjeev's liabilities for $1,400,000 cash. On January 2. Sanjeev Insurance Company's balance sheet reflected the following book value. An independent appraiser estimated the following fair market value for the assets. Required: 1. Compute the amount of goodwill resulting from the purchase. (Hint: Identiflable assets and liabilities are purchased at market value in conformity with the cost principle.) Page 460 2. Compute the adjustments that Lakshmi Financial Services Corporation would make at the end of the current year (ending December 31) for the following items acquired from Sanjeev's Insurance Company: a. Depreciation of equipment (straight-line), assuming an estimated remaining useful life of eight years and no residual value. b. Goodwill (an intangible asset with an indeflnite life)