Cozzi Company is being purchased and has the following balance sheet as of the purchase date:
$$\begin{array} { c c c c }
\text { Current assets } & \$ 200,000 & \text { Liabilities } & \$ 90,000 \
\text { Fixed assets } & \underline { 180,000 } & \text { Equity } & \underline { 290,000 }\
\text { Total } & \underline { \$ 380,000} & \text { Total } & \underline { \$ 380,000 }\

\end{array}$$ The price paid for Cozzi's net assets is $500,000.The fixed assets have a fair value of $220,000, and the liabilities have a fair value of $110,000.The amount of goodwill to be recorded in the purchase is:
A)$0
B)$150,000
C)$170,000
D)$190,000

Question

Cozzi Company is being purchased and has the following balance sheet as of the purchase date:
$$\begin{array} { c c c c } 
\text { Current assets } & \$ 200,000 & \text { Liabilities } & \$ 90,000 \
\text { Fixed assets } & \underline { 180,000 } & \text { Equity } & \underline { 290,000 }\
\text { Total } &  \underline { \$ 380,000} & \text { Total } &  \underline { \$ 380,000 }\

\end{array}$$ The price paid for Cozzi's net assets is $500,000.The fixed assets have a fair value of $220,000, and the liabilities have a fair value of $110,000.The amount of goodwill to be recorded in the purchase is:
A)$0
B)$150,000
C)$170,000
D)$190,000

Quizplus · Accepted Answer

The Answer of Cozzi Company is being purchased and has the following balance sheet as of the purchase date:
$$\begin{array} { c c c c } 
\text { Current assets } & \$ 200,000 & \text { Liabilities } & \$ 90,000 \
\text { Fixed assets } & \underline { 180,000 } & \text { Equity } & \underline { 290,000 }\
\text { Total } &  \underline { \$ 380,000} & \text { Total } &  \underline { \$ 380,000 }\

\end{array}$$ The price paid for Cozzi's net assets is $500,000.The fixed assets have a fair value of $220,000, and the liabilities have a fair value of $110,000.The amount of goodwill to be recorded in the purchase is:
A)$0
B)$150,000
C)$170,000
D)$190,000

Cozzi Company Is Being Purchased and Has the Following Balance