Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $ 12,000,000 in cash. The book values and fair values of Premium Meats€™ assets and liabilities were:

Required:
1. Calculate the amount Fresh Cut paid for goodwill.
2. Record Fresh Cut€™s acquisition of PremiumMeats.

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Receivables Property, plant, and equipment Intangible assets Liabilities Book Value $1,800,000 8,500,000 300,000 (2,700,000) $7,900,000 Fair Value $ 1,600,000 9,900,000 1,700,000 (2,700,000) 10,500,000 Net assets