Question 2 (9 points) On April 30 2019, Portage Ltd. purchased the net assets of May Co. for $1,600,000 cash. May Co. provided the following financial information for April 30, 2019 Assets Liabilities and equities Accounts receivable (Net) 260,000 Accounts payable $210,000 Supplies 240,000 Common shares 750,000 Equipment (net book value) 840,000 Both parties agreed to an independent appraisal which indicated the fair value of the Supplies was $230,000 and the fair value of the Equipment was $1,100,000 The amount reported by May Co. is the fair value of the Accounts receivable and Accounts payable. Required: 1. Calculate the amount of goodwill implied in the purchase price of May Co, by Portage Ltd. Show and label your calculations. (3 marks) 2. In the space below, prepare the journal entry to record the purchase of Morden Co. by Portage Ltd. (3 marks) 3. How would you explain a) the concept of goodwill (1 mark) b) when it is recognized? (1 mark) and c) what Portage Ltd will have to do with goodwill at the end of every period? (1 mark) Record your answer in the space below