Woods Company has one depreciable asset valued at $800,000. Because of recent losses, the company has a net operating loss carry-forward of $150,000. The tax rate is 30%. The company was acquired for $1,000,000. It is likely the benefit will be realized. Compute the goodwill realized in consolidation.
A) $0.
B) $155,000.
C) $200,000.
D) $305,000.
E) $350,000.

Question

Quizplus · Accepted Answer

Consideration $1,000,000 - FV of Assets $800,000 = $200,000 Excess - FV Carry-Forward ($150,000 × .30) $45,000 = Unattributed Excess to Goodwill ($155,000)

Woods Company Has One Depreciable Asset Valued at $800,000