Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

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Dosmann, Inc., bought all outstanding shares of Lizzi Corporation on January 1, 2011, for $700,000 in cash. This portion of the consideration transferred results in a fair-value allocation of $35,000 to equipment and goodwill of $88,000. At the acquisition date, Dosmann also agrees to pay Lizzi's previous owners an additional $110,000 on January 1, 2013, if Lizzi earns a 10 percent return on the fair value of its assets in 2011 and 2012. Lizzi's profits exceed this threshold in both years. Which of the following is true
A) The additional $110,000 payment is a reduction in consolidated retained earnings.
B) The fair value of the expected contingent payment increases goodwill at the acquisition date.
C) Consolidated goodwill as of January 1, 2013, increases by $110,000.
D) The $110,000 is recorded as an expense in 2013.