Strong Company Has Had Poor Operating Results in Recent Years

question 122

Multiple Choice

Strong Company has had poor operating results in recent years and has a $160,000 net operating loss carryforward. Leader Corp. pays $700,000 to acquire Strong and is optimistic about its future profitability potential. The book value and fair value of Strong's identifiable net assets is $500,000 at date of acquisition. Strong's tax rate is 30% and Leader's tax rate is 40%. What is goodwill resulting from this business acquisition?

• A) $40,000.
• B) $88,000.
• C) $104,000.
• D) $152,000.
• E) $248,000.

---

Definitions:

Data Gathering

The collection of information from various sources for analysis and interpretation, often used in research or decision-making processes.

Partializing Information

A therapeutic technique where complex issues are broken down into smaller, more manageable parts to facilitate understanding and problem-solving.

Analyzing Information

The process of examining data or information systematically to break it down into its component parts for better understanding or to make informed decisions.

Group Process

The dynamics and interactions that occur within a group, including communication patterns, decision-making, and leadership roles.