Pug purchased Shelly by issuing common stock valued at $400,000. The book value and fair value of Shelly at the time of acquisition was:

Book Value Fair Value

Cash $30,000 $30,000

Accounts Receivable 50,000 50,000

Inventory 60,000 70,000

Equipment (net) 80,000 60,000

Building (net) 200,000 250,000

Accounts Payable 100,000 100,000

Common Stock 100,000

Retained Earnings 220,000

If Pug acquires 100% of Shelly, what amount will be recorded as goodwill?

a. $40,000

b. $80,000

c. $320,000

d. $400,000