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Bryce Company has net assets with fair value of $600,000. Due to recent losses, the company...

Bryce Company has net assets with fair value of $600,000. Due to recent losses, the company also has a net operating loss carryforward of $160,000. The tax rate is 25%. It is more likely than not that the tax benefit will be realized. The company was acquired for $800,000. What amount of goodwill should be recognized in the consolidated financial statements?

a. 200,000

b. 160,000

c. 0

d. 50,000

e. 150,000

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Answer #1

Goodwill in consolidated financial statements = $800,000 - $600,000 = $200,000

Option a. is correct answer.

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