Tarkington Beers,Inc

question 24

Multiple Choice

Tarkington Beers,Inc.purchased the most popular and well-known pub in a college town.Its purchase price was $1,200,000.The appraisers determined that the land should be valued at $400,000,the building at $500,000,and the equipment at $200,000.Which of the following statements is correct?

• A)Tarkington Beers,Inc.should record only the appraised value of the assets.
• B)Tarkington Beers,Inc.needs to adjust the value of the assets in proportion to their appraised value so that the total of the assets equals the purchase price.
• C)Tarkington Beers,Inc.paid too much for the business and needs to record a loss.
• D)Tarkington Beers,Inc.needs to record goodwill of $100,000.

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