On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:  PumpkinSpiceCash $50,000   $15,000  Accounts Receivable  70,000    25,000  Inventory  30,000    20,000  Land  150,000    80,000  Buildings and Equipment  250,000    200,000  Less: Accumulated Depreciation  (70,000)   (20,000) Investment in Spice Co.  210,000       Total Assets $690,000   $320,000             Accounts Payable $40,000   $10,000  Bonds Payable  150,000    40,000  Common

Stock  300,000    90,000  Retained Earnings  200,000    180,000  Total Liabilities and Equity $690,000   $320,000  At the date of the business combination, the book values of Spice's assets and liabilities approximated fair value except for inventory, which had a fair value of $30,000, and land, which had a fair value of $95,000.Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?

A. $30,000
B. $5,000
C. $0
D. $25,000


Answer: B

Business

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