Company A acquired all the outstanding common stock of Company B for $46,000,000 in cash. The book values and fair values of Company B assets and liabilities were as follows:

Book Value Fair Value
Current assets $ 17,000,000 $ 20,000,000
Property, plant, and equipment 31,600,000 37,600,000
Other assets 5,400,000 6,400,000
Current liabilities 9,800,000 9,800,000
Long-term liabilities 17,200,000 16,200,000

Required:
Calculate the amount paid for goodwill.

$8,000,000

Explanation:

The computation of amount paid for goodwill is shown below:-

Net fair value of assets acquired = (Fair Value of current assets + Fair value of Property, plant, and equipment + Fair value of other assets) - (Fair value of Current liabilities + Fair value of  Long-term liabilities)

= ($20,000,000 + $37,600,000 + $6,400,000) - ($9,800,000 + $16,200,000)

= $64,000,000 - $26,000,000

= $38,000,000

Amount paid for goodwill = Outstanding common stock - Net fair value of assets acquired

= $46,000,000 - $38,000,000

= $8,000,000

So, for computing the amount paid for goodwill we simply applied the above formula.

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!