Recording Goodwill upon Acquisition On January 1, the balance sheet of Naperville Company was as follows. Assets Accounts receivable (net of allowance) $84,000 Inventory 126,000 Plant and equipment (net of depreciation) 280,000 Land 42,000 Total assets $532,000 Liabilities Current Noncurrent Equity Equity Total liabilities and equity $53,200 112,000 $165,200 366,800 $532,000 On January 1, Chicago Corporation purchased all of the assets and assumed all of the liabilities listed on the above balance sheet for $406,000 cash. The assets, on date of purchase, were valued by Chicago Corporation as follows: Accounts receivable (net), $70,000; Inventory, $119,000; Plant and equipment (net), $280,000; and Land, $63,000. In addition, Chicago Corporation estimated purchased intangible assets of $2,800 for customer list, and $11,200 for trade names (both previously unrecorded). The liabilities were valued at their carrying amounts. Required a. Compute the amount of goodwill included in the purchase price paid by Chicago Corporation. b. Provide the entry that Chicago Corporation should make to record the purchase of Naperville Company. c. What is the minimum amount of goodwill that Chicago Corporation can amortize at the end of the year? Chicago Corp. is not a private company. a. Amount of goodwill in purchase price $ 0 x Date b. January 1 Inventory Plant and Equipment (net) Land Intangible Asset-Customer List Intangible Asset-Tradenames Current Liabilities Account Name Dr. Cr. Accounts Receivable (net) 70,000 119,000 oc 0 0 280,000 0 63,000 0 2,800 x Cash 0 11,200 x 0 53,200 x 0 165,200 x 0 0x 0 0x To record the purchase. c. What is the minimum amount of goodwill that Chicago Corporation can amortize at the end of the year? $ 0