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When Bristol-Myers Squibb purchased DuPont Pharmaceuticals from E.I. DuPont de Nemours for $7.8 billion in cash, it acquired assets with a fair market value of $5.1 billion and assumed the liabilities of DuPont Pharmaceuticals valued at $1.1 billion.
a. How much goodwill was recognized on the acquisition?
b. Describe how this transaction affected the basic accounting equation.