Northern purchased the entire business of Southern including all its assets and liabilities for $600,000. Below is information related to the two companies:
Northern Southern
Fair value of assets $ 1,050,000 $ 800,000
Fair value of liabilities 575,000 300,000
Reported assets 800,000 650,000
Reported liabilities 500,000 250,000
Net Income for the year 60,000 50,000
How much goodwill did Northern pay for acquiring Southern?
A) $100,000.
B) $300,000.
C) $200,000.
D) $150,000.
Answer: A
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.