On March $4($of the current fiscal year$),$ we completed our acquisition of Nuance Communications, Inc. for a total purchase price of $$35\mathrm{.}7$ billion, consisting primarily of cash. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows:

$ millions

Goodwill $$30,985$

Intangible assets $8,294$

Other assets $112$

Other liabilities $(3,745)$

Total $$35,646$

Following are the details of the purchase price allocated to the intangible assets acquired:

$ millions Amount Weighted Average Life

Customer$-$related $$4,9599$ years

Technology$-$based $2,9265$ years

Marketing$-$related $4094$ years

Total $$8,294$

Required

a$.$ What total amount of assets did Microsoft acquire in the Nuance Communications acquisition?

$Answer $1$

b$.$ What proportion of the total assets is related to intangible assets, including goodwill?

$ millions Numerator Denominator $\%$ of Assets Related

Answer $2$

Answer $3$

c$.$ What amount of goodwill did Microsoft record for the Nuance acquisition? How did Microsoft determine that amount?

Microsoft recorded $Answer $4$

million of goodwill associated with the Nuance Communication acquisition. First, Microsoft assigned fair values to all of the identifiable assets and liabilities. Goodwill is a residual calculation: Microsoft subtracted the fair value of the net assets acquired of $Answer $5$

from the purchase price of $Answer $6$

$.$

d$.$ How will the goodwill from the Nuance Communications acquisition affect Microsoft$$s income statement in the current period?

Goodwill Answer $7$

affect Microsoft's income statement in the acquisition year.

e$.$ Determine the amount of amortization that Microsoft will record in the acquisition year on the acquired intangible assets $($including goodwill$).$ Microsoft$$s fiscal year ends June $30.$ Assume the company$$s policy is to record depreciation and amortization beginning in the month an asset is capitalized.

Note: Round answers to the nearest dollar, if applicable.

Note: Do not round intermediate calculations, if applicable.

$ millions

Answer $8$