Question
Potters Wands acquired Malfoy Company in 20X5. Neither company has ever been a part of any prior acquisition, but Malfoy Company has developed a valuable
Potters Wands acquired Malfoy Company in 20X5. Neither company has ever been a part of any prior acquisition, but Malfoy Company has developed a valuable list of customers to which Potters Wands would like to market their products. On June 30, 20X5 Potters Wands paid cash to complete the acquisition of Malfoy Company. As of the date of the acquisition, Malfoy Company's balance sheet reported total assets of $25.0 million and total liabilities of $12.0 million. At the same date, the fair market value of Malfoy Company's separately identifiable assets was $32.5 million and the fair market value of separately identifiable liabilities was $12.0 million. Potters Wands recorded $5.3 million of Goodwill on its balance sheet as a result of this transaction. Based on this information, how much did Potters Wands pay to acquire Malfoy?
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