Consolidation Working Paper, Identifiable Intangibles, Goodwill

International Technology Inc. (ITI) acquires all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2010. Amounts paid are as follows (in millions):

Cash consideration to the former shareholders of GOC	$40
1,200,000 shares of new $1 par common stock issued	48
Registration fees on new stock issued, paid in cash	2.4
Outside legal and advisory services, paid in cash	4
Fair value of earnings contingency	1.6

The earnings contingency provides for a potential payout to the former shareholders of GOC at the end of the third year following acquisition. The balance sheets of both companies immediately prior to the acquisition are as follows. Fair values of GOC's assets and liabilities at the date of acquisition are also provided.

	ITI	GOC
Balance Sheets (in millions)	Book Value	Book Value	Fair Value
Current assets	$160	$8	$12
Property, plant and equipment, net	400	104	56
Intangible assets	1,040	16	24
Total assets	$1,600	$128
Current liabilities	$120	$16	$16
Long-term liabilities	960	80	82.4
Common stock, par	16	3.2
Additional paid-in capital	440	48
Retained earnings	80	(20)
Accumulated other comprehensive income	(12)	2.4
Treasury stock	(4)	(1.6)
Total liabilities and equity	$1,600	$128

The intangible assets reported above consist of patents and trademarks. GOC also has the following previously unreported intangible assets that meet ASC Topic 805 requirements for asset recognition:

	Fair Value
Advanced technology	$4
Customer lists	20

REQUIRED:

(a) Prepare the journal entry or entries ITI makes to record the acquisition on its own books (in millions and enter all decimal places).

(b) Calculate Goodwill.

Note: Please show all work/calculations so I may better understand the process of solving the question. Thank you!