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Lost River Adventures is purchasing The Cabin Co. for $13.7 million in cash. The fixed assets of The Cabin Co. were recently appraised at $11.8

Lost River Adventures is purchasing The Cabin Co. for $13.7 million in cash. The fixed assets of The Cabin Co. were recently appraised at $11.8 million. In addition, The Cabin Co. has $1.7 million in working capital and no long-term debt. Lost River Adventures will use the purchase accounting method to record this acquisition. What is the amount of the goodwill that will be shown on the books of Lost River Adventures from this acquisition?

a. $0 b. $0.2 million c. $0.8 million d. $1.9 million

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