On January 1,2015,the Knight Corporation Purchased 80% of the Red

On January 1,2015,the Knight Corporation purchased 80% of the Red Company's voting stock for $1,500,000.Red's net assets had a book value of $1,350,000;the fair value of Red's land was $325,000 greater than its book value.The book value of Knight's assets immediately after the acquisition of Red totaled $6,850,000 while Red's assets had a book value of $1,350,000.Assuming that Knight used the acquisition method to prepare its consolidated balance sheet,how much goodwill was reported on the January 1,2015 consolidated balance sheet?

A) $525,000
B) $200,000
C) $160,000
D) $42,000