Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $850,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were:
Book Value Fair Value
Current assets (net) $ 130,000 $ 125,000
Property, plant, equip. (net) 600,000 750,000
Liabilities 175,000 175,000
Lake would record goodwill of:
A) $0.
B) $150,000.
C) $345,000.
D) $850,000.
Answer: B
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