The Clementine Company agreed to purchase the Orange Company for $650,000. At the date of purchase, Orange had current assets with a fair market value of $400,000, noncurrent assets (including no marketable securities) with a fair market value of $700,000, and liabilities of $500,000. In accounting for this transaction, Clementine should record current assets at $550,000. record goodwill of $50,000 to be reviewed annually for impairment. record noncurrent assets at $650,000. record a debit of $50,000 as a loss on the purchase.
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