On January 1, 2003, Fishing Creek Company purchased Skull Valley Technologies for $8,800,000 cash. The book value and fair value of Skull Valley’s assets as of the date of the acquisition are listed below: Book Market Value Value Cash sitewer: cece ade. Se aaa etal metre $ 100,000 $ 100,000 ACCOUNTS*REGEINAbI Gn Sa hitiye mtceras cecccianicis EAR ORMOMGIII oy a alles eeiee sae 500,000 500,000 Inventory his BS ase ob er ee SAA COTA. carhied & a boiees cue hs 950,000 1,200,000 Property; plantandsequipments..:o ra me ne een ee. eee 1,500,000 1,900,000 MPAGSMAarke speeh Berke eoerass We oese SNA Gere ees Mis Seto 0 2,000,000 otalssak ac eee Hee AS eee age EB aeea eres Pare aD $3,050,000 $5,700,000 In addition, Skull Valley had liabilities totaling $4,000,000 at the time of the acquisition. 1. At what amount will Skull Valley’s trademark be recorded on the books of Fishing Creek, the acquiring company? 2. How much goodwill will be recorded as part of this acquisition? 3. How much goodwill amortization expense will Fishing Creek recognize in 2003? What assumptions are necessary to answer this question? 4. Interpretive Question: What was Skull Valley’s recorded stockholders’ equity immediately before the acquisition? Under what circumstances does stockholders’ equity yield a poor measure of the fair value of a company?