Question: On January 1 , 2 0 2 0 , Ridge Road Company acquired 2 0 percent of the voting shares of Sauk Trail, Inc., for

On January 1,2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,800,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trails board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trails board, which gave it the ability to significantly influence Sauk Trails operating and investing activities.
The January 1,2020, carrying amounts and corresponding fair values for Sauk Trails assets and liabilities follow:
Carrying AmountFair ValueCash and receivables$115,000$115,000Computing equipment5,045,0005,780,000Patented technology105,0004,010,000Trademark155,0002,010,000Liabilities(190,000)(190,000)
Also, as of January 1,2020, Sauk Trails computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.
During the next two years, Sauk Trail reported the following net income and dividends:
Net IncomeDividends Declared2020$1,810,000$155,00020211,995,000165,000 How much of Ridge Roads $2,800,000 payment for Sauk Trail is attributable to goodwill?

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