Bryer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value of Stellar's assets is $2,000,000, and its liabilities have a fair value of $1,200,000. The book value of Stellar's assets and liabilities are not known. For what amount would Bryer record goodwill associated with the purchase?

Multiple Choice

$800,000.

$500,000.

$700,000.

$0.

Question

Lukas Rosario

Business

10 March, 13:24

Bryer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value of Stellar's assets is $2,000,000, and its liabilities have a fair value of $1,200,000. The book value of Stellar's assets and liabilities are not known. For what amount would Bryer record goodwill associated with the purchase?

Multiple Choice

$800,000.

$500,000.

$700,000.

$0.

+2

Answers (1)

Know the Answer?

Tess Butler · Answer 1

700.000

Explanation:

Good will: Purchase price - Fair value of identifiable net assets

Fair value of identifiable net assets : 2,000,000-1,200,000=800,000

Good will : 1,500,000-800,000=700,000