Dennis Company purchases Miles Company for $4,200,000 cash on January 1, 2018. The book value of Miles Company's net assets reported on its December 31, 2017 financial statement was $3,600,000. An analysis indicated that the fair value of Miles's tangible assets exceeded the book value by $600,000, and the fair value of identifiable intangible assets exceeded book value by $320,000. What amount of gain or goodwill is recognized by Dennis?

$920,000 gain

$600,000 goodwill

$320,000 gain

$320,000 goodwill.

Can you also explain how the answer is not $320,000 goodwill. Thanks!