eBookCheck my workCheck My Work button is now enabledItem 2 Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $12,000,000 in cash. The book values and fair values of Premium Meats assets and liabilities were as follows: Book Value Fair Value Accounts Receivable $ 1,800,000 $ 1,600,000 Equipment 8,500,000 9,900,000 Patents 300,000 1,700,000 Notes Payable (2,700,000) (2,700,000) Net assets $ 7,900,000 $ 10,500,000

Required:

1. Calculate the amount Fresh Cut should report for goodwill.

2. Record Fresh Cut's acquisition of Premium Meats.