If a company has net assets equal to $3.25 million but is sold for $5.35 million, what is the amount of goodwill recorded on the acquirer's balance sheet?

Goodwill is the excess amount paid for a company above its fair value of identifiable net assets at the time of acquisition. To calculate goodwill, you need to determine the difference between the purchase price and the fair value of the net assets.

In this case, the fair value of the company's net assets is $3.25 million, and the purchase price is $5.35 million. The calculation for goodwill is:

Goodwill = Purchase Price - Fair Value of Net Assets

Goodwill = $5.35 million - $3.25 million

Goodwill = $2.1 million

This calculation shows that the correct amount of goodwill to be recorded on the acquirer's balance sheet is $2.1 million, which corresponds to the correct answer. Goodwill reflects the premium paid for the company's reputation, brand, customer relationships, and other intangible assets that are not reflected in the identifiable net assets.