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Goodwill results from the purchase of one firm by another for a price that is greater than the fair value of the net assets acquired.On
Goodwill results from the purchase of one firm by another for a price that is greater than the fair value of the net assets acquired.On January 1, 2017, Blue Grass Co. purchased Red Grass Co. for $2,400,000 when the net assets were value at $2,000,000.Goodwill will be tested annually for impairment.Assume that after the first year there was an impairment of $30,000.Compute the value of goodwill to be recorded on the books of Blue Grass Co. upon purchase of the business.
A. $30,000
B. $2,060,000
C. $400,000
D. $430,000
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