Company a Buys Company B for $3,500,000

question 10

Multiple Choice

Company A buys Company B for $3,500,000. Company A had a pre-merger net worth of $8,000,000; B's net worth was $2,000,000. The transaction was accounted for as a pooling of interests. Company A wants to write off any available goodwill as slowly as allowable. How much would Company A write off each year?

• A) $112,500
• B) $ 37,500
• C) $150,000
• D) 0

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