Pier 5 Has Been in Business 8 Years with 4

Short Answer

Pier 5 has been in business 8 years with 4 stores in the San Francisco bay area.Their local reputation for making savory pies such as curried potatoes is well recognized.A national food distributor has offered to purchase the company.Pier 5 has $0.9 million of net assets at book value,but those net assets have a fair market value of $1.2 million.If the distributor offers to buy Pier 5 for $3.5 million,how much will be recorded as goodwill based on the offered purchase price?