The fair market value of the fixed assets of Markco, Inc. is $8,500.
Big-T paid $13,000 for Markco, Inc. with funds from a long-term debt offering. The purchase method of accounting is used.
What is the amount of goodwill on the books of Big-T as a result of the merger?
A) $2,000
B) $4,500
C) $5,000
D) $7,000
E) $9,000

Question

The fair market value of the fixed assets of Markco, Inc. is $8,500.
Big-T paid $13,000 for Markco, Inc. with funds from a long-term debt offering. The purchase method of accounting is used.
What is the amount of goodwill on the books of Big-T as a result of the merger?
A) $2,000 
B) $4,500 
C) $5,000 
D) $7,000 
E) $9,000

Quizplus · Accepted Answer

The Answer of   The fair market value of the fixed assets of Markco, Inc. is $8,500.
Big-T paid $13,000 for Markco, Inc. with funds from a long-term debt offering. The purchase method of accounting is used.
What is the amount of goodwill on the books of Big-T as a result of the merger?
A) $2,000 
B) $4,500 
C) $5,000 
D) $7,000 
E) $9,000

The Fair Market Value of the Fixed Assets of Markco