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Ms. Lorraine sells her business to Mr. Katchy. An independent appraiser indicates that the business...

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Accounting

Ms. Lorraine sells her business to Mr. Katchy.

An independent appraiser indicates that the business assets other than goodwill, have the following FMV:

Inventory: $ 100,000

Building: $1,000,000

Land: $ 400,000

After negotiations, Ms. Lorraine and Mr. Katchy agree on a sale price of $2,000,000

Task: Allocate the purchase price among the asset, and the goodwill.

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