On June 30,2014,Diode Inc.purchased for cash at $50 per share all 150,000 shares of outstanding common stock of Moore Company.Moore's balance sheet at June 30,2014,showed net assets with a book value of $6,000,000.The fair value of Moore's property,plant,and equipment on June 30,2014,was $800,000 in excess of its book value.What amount,if any,will be recorded by Diode as goodwill on the date of purchase?
A) $0
B) $700,000
C) $800,000
D) $1,500,000

Question

Quizplus · Accepted Answer

The excess of the fair value of Moore's property, plant, and equipment over its book value is $800,000. This amount is recorded as goodwill on the date of purchase.