The notes to recent financial statements of Whitacre-Olivo contained the following information (dollar amounts in millions):
3. Acquisitions and Divestitures
On June 20, 2011, the Company . . . finalized the Company’s acquisition from Unilever of the Medex's personal care business . . . for an aggregate purchase price of $112 . . . This strategic acquisition is expected to strengthen Whitacre-Olivo personal care business in Europe, primarily in the liquid body cleansing and deodorants business. Total purchase price consideration of $112 has been allocated to the net assets acquired based on their respective fair values at June 20, 2011 . . .
Assume that Colgate-Palmolive acquired 100 percent of the fair value of the net assets of Medex's in a recent year for $137 million in cash. Sanex's assets at the time of the acquisition had a book value of $65 million and a fair value of $90 million. Whitacre-Olivo also assumed Medex's liabilities of $43 million (book value and fair value of the liabilities are the same).
Prepare the entry on the date of acquisition as a merger. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
answer
Goodwill: [$137 – ($90 – $43)] = $90
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