(Calculation of goodwill when the parent purchases less than 100% of a subsidiary, LO 1) On July 31, 2005 Janow Inc. (Janow) purchased 80% of the common shares of Worby Ltd. (Worby) for $5,200,000. The book and market values of Worby’s assets and liabilities on July 31, 2005 were:

Required:
Calculate the amount of goodwill that Janow would report on its July 31, 2005 consolidated balance sheet as a result of its purchase of Worby.

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Assets Liabilities Book Value on Worby's July 31, 2005 Balance Sheet $8,000,000 5,000,000 Fair Value of Worby's Assets and Liabilities on July 15, 2005 $11,500,000 6,000,000