Assume Haledan paid $16 million to purchase Northshore.com. Assume further that Northshore had the following summarized data at the time of the Haledan acquisition (amounts in millions):

Northshore’s long-term assets had a current market value of only $18 million.

* Requirements
1. Compute the cost of goodwill purchased by Haledan.
2. Journalize Haledan’s purchase of Northshore.
3. Explain how Haledan will account for goodwill in thefuture.

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Northshore.com Assets Liabilities and Equity ...$13 Long-term assets.23 $36 Current assets 23 Stockholders' equity.11 $36