Carla Vista Company purchases Sandhill Company for $4550000 cash on January 1, 2026. The book value of Sandhill Company's net assets reported on its December 31, 2025 financial statement was $3950000.Analysis indicated that the fair value of Sandhill's tangible assets exceeded the book value by $670000, and the fair value of identifiable intangible assets exceeded the book value by $355000. What amount of gain or goodwill is recognized by Carla Vista?

$1025000 gain.

$670000 goodwill.

$425000 goodwill.

$425000 gain.