On January 1, 2012, 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.

In addition, Skull Valley had liabilities totaling $4,000,000 at the time of the acquisition.
Required:
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. 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 acompany?

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Book Value Market Value Cash.. Accounts receivable Inventory 100,000 100,000 500,000 950,000 1,200,000 500,000 1,900,000 500,000 Trademark Totals $3,050,000 $5.700,000