Johnson corporation acquired all of the outstanding common stock of smith corporation for $11,840,000 in cash. the book value of smith’s net assets (assets minus liabilities) was $8,500,000. the fair values of all of smith’s assets and liabilities were equal to their book values with the following exceptions:
book value fair value
receivables $ 2,000,000 $ 1,730,000
property, plant, and equipment 8,700,000 10,170,000
intangible assets 270,000 1,340,000