Problem

Lamichael Company purchased 100 percent of the outstanding voting shares of Darrell Corpor...

Lamichael Company purchased 100 percent of the outstanding voting shares of Darrell Corporation in the open market for $200,000 cash and Darrell was merged into Lamichael Company. On the date of acquisition, the fair value of Darrell Corporation's property and equipment was $310,000 and the fair value of its long-term debt was $150,000. Darrell has no other assets or liabilities. What amount of goodwill would Lamichael record related to the purchase of Darrell Corporation?

a. No goodwill should be recorded by Lamichael.

b. $260,000

c. $110,000

d. $40.000

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