Nadine's Home Fashions Has $2

question 43

Multiple Choice

Nadine's Home Fashions has $2.12 million in net working capital. The firm has fixed assets with a book value of $31.64 million and a market value of $33.9 million. The firm has no long-term debt. The Home Centre is buying Nadine's for $37.5 million in cash. The acquisition will be recorded using the purchase accounting method. What is the amount of goodwill that The Home Centre will record on its balance sheet as a result of this acquisition?

• A) $1.48 million
• B) $3.34 million
• C) $3.74 million
• D) $4.14 million
• E) $5.86 million

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