Assume Kaledan paid $18 million to purchase Southwest.com. Assume further that Southwest had the following summarized data at the time of the Kaledan acquisition (amounts in millions):

Southwest’s long-term assets had a current market value of only $17 million.

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

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Southwest.com Liabilities and Equity Assets 22 Stockholders' equity. $32 $32