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On January 1, Year 1, RAK, Inc acquired a 25% interest in Tech Corp, for $375,000. At the date of acquisition, the net assets had
On January 1, Year 1, RAK, Inc acquired a 25% interest in Tech Corp, for $375,000. At the date of acquisition, the net assets had a fair value in excess of shareholders' equity of $200,000. The fair value in excess of book value is the result of equipment with a remaining usefut life of four years. For the year ended December 31, Year 1, Tech had net income of $60,000 and RAK recelved a dividend of $10,000 from Tech. At December 31. Year 1. Tech had shareholders' equity of $820,000. What is the amount of goodwill associated with RAK's purchase of Tech? $175,000 $170,000 $125,000 $93,750
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