On January 1, 2017, Dennis Company purchases Miles Company for $4.2 million in cash. Miles' financial statement dated December 31, 2016, indicates the firm's net assets have a book value of $3.8 million. An analysis conducted by Dennis on December 31 suggests that the book value of Miles' tangible assets is $600,000 lower than their fair value. This analysis also indicates that the fair value of Miles' identifiable intangible assets exceeds their book value by $320,000. Given these figures, Dennis should recognize

• $520,000 in goodwill.
• B
• :
• a $520,000 gain.
• C
• :
• a $920,000 gain.
• D
• :
• $400,000 in goodwill.