Lisa Corporation made an offer to acquire the assets and assume the liabilities of Toga Corporation. 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.

TOGA CORPORATION Balance Sheet {in thousands) December 31, 2016 Assets Accounts receivable ........................................................... $ 40,000 Inventories ............................................................................ 90,000 Equity method investments................. ................................. 95,000

Property, plant and equipment .............................................275,000 Total assets ........................................................................ $500,000 Liabilities and Shareholders' Equity Current liabilities ............................................................... $ 70,000 Capital stock ...................................................................... 230,000

Accumulated other comprehensive income.........................10,000 Retained earnings .............................................................. 190,000 Total liabilities and shareholders' equity ............................ $ 500,000

The fair values of Toga's assets as of December 31, 2016, are estimated to be as follows: (in thousands) Fair Value Accounts receivable .......................................................... $ 30,000 Inventories ........................................................................... 50,000 Equity method investments. .............................................. 120,000 Property, plant and equipment ........................................... 200,000 Total fair market value ...................................................... $400,000

*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 $1,000,000,000 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.