K First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of $8,000,000. What amount of goodwill is recorded? OA. $19,000,000 OB. $10,000,000 OC. $11,000,000 O D. $9,000,000 4.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...
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K
First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's
assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time
of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of
$8,000,000. What amount of goodwill is recorded?
OA. $19,000,000
OB. $10,000,000
OC. $11,000,000
O D. $9,000,000
G
Transcribed Image Text:K First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of $8,000,000. What amount of goodwill is recorded? OA. $19,000,000 OB. $10,000,000 OC. $11,000,000 O D. $9,000,000 G
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