1. The capital balances of the DEF Partnership are as follows:

Danielson	$180,000
Eklund	95,000
Forsberg	150,000
Total	$425,000

The partners' income sharing ratio is: Danielson, 25%; Eklund, 45%; Forsberg, 30%. Gustafson joins the partnership by contributing $125,000 to the partnership for a 20% interest in partnership capital. Assume the partnership's identifiable net assets are carried at amounts approximating fair value. Now assume Gustafson paid $90,000 for a 20% interest in partnership capital. If the goodwill method is used to record the admission of Gustafson, goodwill will be recorded on the books of the partnership in the amount of:

	A.	$0
	B.	$16,250
	C.	$18,750
	D.	$20,000