Please answer question #2 I have already completed question #1. I am providing question #1 so you have the information needed to answer question #2. Thank you.

Question #2 When does Goodwill occur? How is Goodwill calculated? How is Goodwill classified in the financial statements? Question #1 East Carolina Lumber Co. purchased an electronic saw to cut various types and sizes of logs. The saw had a list price of $85,000. The seller agreed to allow a 10% discount because East Carolina paid cash. Taxes were 5% of the net purchase price. Delivery terms were FOB shipping point. Freight cost amounted to $2,250. Modifications to the sawmill to allow for installation of the new saw cost $3,200. East Carolina had to hire an individual to operate the saw. The operator spent the first half month of employment working on installation of the saw. The operator was paid an annual salary of $33,000. Costs incurred during installation and set-up (calibration, scrap, etc.) totaled $750. The cost of the company's liability insurance policy increased by $5,300 per year as a result of the acquisition of the saw. The saw had a five-year useful life and an expected salvage value of $5,000. Required Determine the amount to be capitalized in an asset account for the purchase of the saw. You must show your work for complete credit. East Carolina Lumber Co. List price of Electrical Saw 85,000 Less : Discount@5% 8,500 85,000 x .1 Net 76,500 85,000 8,500 Add : Taxes 3,825 76,500 x .05 Add : Freight 2,250 Add : Modification while installation 3,200 Add : Half month salary of operator 1,375 33,000 / 12 = 2,750/2 Add : Cost incurred during installation 750 Total Acquisition Cost 87,900