On April 1, 2006, Dart Co. paid $620,000 for all the issued and outstanding common stock of Wall Corp. The recorded assets and liabilities of Wall Corp. on April 1, 2006, follow:

Cash

$ 60,000

Inventory

180,000

Property and equipment (net of accumulated depreciation of $220,000)

320,000

Goodwill

100,000

Liabilities

(120,000)

Net assets

$ 540,000

On April 1, 2006, Wall’s inventory had a fair value of $150,000, and the property and equipment (net) had a fair value of $380,000. What is the amount of goodwill resulting from the business combination?

  1. $150,000
  2. $120,000
  3. $ 50,000
  4. $ 20,000