Answer: $26,000
Explanation:
Given that,
Acquired all the outstanding common stock (in cash) = $70,300
Market value is also known as fair value.
Fair values of Red Rock's assets and liabilities:
Current assets = $22,800
Property, plant, and equipment = $52,100
Other assets = $5,400
Current liabilities = $15,100
Long-term liabilities = $20,900
Total = Current assets + Property, plant, and equipment + Other assets - Current liabilities - Long-term liabilities
= $22,800 + $52,100 + $5,400 - $15,100 - $20,900
= $44,300
Amount paid = $70,300
Therefore,
Amount paid for goodwill = Amount paid - Total
= $70,300 - $44,300
= $26,000
