Lisa Corporation made an offer to acquire the assets and assume the liabilities of Toga Corpo- ration. Toga's balance sheet as of December 31, 2016, appears below. Toga has no unrecorded identifiable intangible assets, liabilities or contingent liabilities. The market values of Toga's current liabilities approximate their book values. Lisa Corporation offered Toga Corporation's Board of Directors \($1\) billion in cash for 100 percent ownership interest.

The fair values of Toga’s assets as of December 31, 2016, are estimated to be as follows:

Required

a. Identify five business factors or conditions that generally give rise to goodwill.

b. Determine the amount of goodwill that would be recorded on the books of Lisa Corporation if the \($1\) billion cash offer is accepted by Toga Corporation.

c. Explain why the goodwill determined in part b was not included on Toga Corporation’s balance sheet.

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(in thousands) Assets TOGA CORPORATION Balance Sheet December 31, 2016 Accounts receivable.. Inventories.. Long-term marketable debt securities. Property, plant and equipment... Total assets Liabilities and Shareholders' Equity Current liabilities.. Capital stock Accumulated other comprehensive income. Retained earnings Total liabilities and shareholders' equity $ 40,000 90,000 95,000 275,000 $500,000 $ 70,000 230,000 10,000 190,000 $500,000