On June 1, Cline Co. paid $800,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn’s assets and liabilities on June 1 follow:
|
Cash |
$150,000 |
|
Accounts receivable |
180,000 |
|
Capitalized software costs. |
320,000 |
|
Goodwill |
100,000 |
|
Liabilities |
130,000 |
|
Net assets |
$620,000 |
On June 1, Renn’s accounts receivable had a fair value of $140,000. Additionally, Renn’s inprocess research and development was estimated to have a fair value of $200,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill?
a. $320,000.
b. $120,000.
c. $80,000.
d. $20,000.