Question: E7-48B. (Learning Objectives 5, 6: Compute and account for goodwill and impairment)LO 5 6 Assume Doltron Co. paid $18 million to purchase Bailey Industries. Assume

E7-48B. (Learning Objectives 5, 6: Compute and account for goodwill and

E7-48B. (Learning Objectives 5, 6: Compute and account for goodwill and impairment)LO 5 6 Assume Doltron Co. paid $18 million to purchase Bailey Industries. Assume further that Bailey Industries had the following summarized data at the time of the Doltron Co. acquisition (amounts in millions): Bailey Industries Assets Liabilities and Equity Current assets... Long-term assets 26 Stockholders' equity... $43 $43 Bailey Industries' current assets had a current market value of $17 million, long-term assets had a current market value of only $21 million, and liabilities had a market value of $24 million. Requirements 1. Compute the cost of goodwill purchased by Doltron Co. 2. Journalize Doltron Co.'s purchase of Bailey Industries 3. Explain how Doltron Co. will account for goodwill

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