Sew Corporation’s stockholders’ equity at December 31, 2011, follows (in thousands):
|
Capital stock, $100 par |
$3,000 |
|
Additional paid in capital |
500 |
|
Retained earnings |
500 |
|
Total stockholders’ equity |
$4,000 |
On January 3, 2012, Sew sells 10,000 shares of previously unissued $100 par common stock to Pan Corporation for $1,400,000. On this date the recorded book values of Sew’s assets and liabilities equal their fair values. Goodwill from Pan’s investment in Sew at the date of purchase is:
a $0
b $50,000
c $300,000
d $400,000