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Merger and Acquisition Accounting : A pharmaceutical company acquired a biotechnology startup for $10,000,000 by issuing 100,000 shares of common stock valued at $100 per
Merger and Acquisition Accounting: A pharmaceutical company acquired a biotechnology startup for $10,000,000 by issuing 100,000 shares of common stock valued at $100 per share. If the fair value of the startup's net assets acquired is $8,000,000, calculate the amount of goodwill recognized in the acquisition. Discuss the accounting treatment for goodwill and its implications for the acquirer's financial statements.
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