q.37

On December 31, 2008, Mercury Corporation acquired 100% ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $300,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $150,000. The book values and fair values of Saturn's assets and liabilities were same except for inventories which had decreased by $5,000

Based on the preceding information, what amount of goodwill will be reported if the acquisition price was $195,000?

Select one:

a. 0

b. 35,000

c. 40,000

d. 15,000