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Question
On January 2, 2012, the Rambler Company purchased 40% of the outstanding common stock of the AMC Corporation for $2,000,000. AMC's net assets had a book value of $3,900,000 as of January 2, 2012. AMC's buildings were undervalued by $350,000, their land was overvalued by $75,000, and their inventory was undervalued by $145,000.
Required:
Determine the amount of goodwill that Rambler acquired as a result of the AMC stock purchase.
Answer
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