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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.

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Answers (1)
  1. 10 March, 13:37
    0
    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
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