ABC buys a smaller company XYZ for a negotiated price of £1 million. XYZs assets are valued at £750,000. Assuming goodwill is amortized over 5 years, the value of goodwill in ABC's Statement of Financial Position at the end of the third year after acquisition will be:
A) £400,000
B) £300,000
C) £150,000
D) £100,000

Question

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(Goodwill is £250,000 amortised at £50,000 per year)

ABC Buys a Smaller Company XYZ for a Negotiated Price