A company has the following expenditures during the year. The company believes that these efforts have increased the fair value of the entire company by $325,000. How much goodwill can the company recognize at the end of the year associated with these expenditures?
A) $0.
B) $80,000.
C) $230,000.
D) $325,000.

Question

A company has the following expenditures during the year.  The company believes that these efforts have increased the fair value of the entire company by $325,000. How much goodwill can the company recognize at the end of the year associated with these expenditures?
A) $0. 
B) $80,000. 
C) $230,000. 
D) $325,000.

Quizplus · Accepted Answer

These costs are expensed as incurred and are not capitalized as goodwill because they are costs of doing business and not associated with the acquisition of another business.

A Company Has the Following Expenditures During the Year