Use the Following Information to Answer the Question(s)below

question 8

Multiple Choice

Use the following information to answer the question(s) below.
Goldberg Corporation owned a 70% interest in Savannah Corporation on December 31,2010,and Goldberg's Investment in Savannah account had a balance of $3,900,000.Savannah's stockholders' equity on this date was as follows:
On January 1,2011,Savannah issues 80,000 new shares of common stock to Goldberg for $16 each.
-On January 1,2011,assume the fair values of Savannah's identifiable assets and liabilities equal book values.What is the change in the amount of goodwill associated with the issuance of 80,000 additional shares to Goldberg? (Use four decimal places. )

• A)Increase goodwill $38,176.
• B)Decrease goodwill $38,176.
• C)Increase goodwill $384,000.
• D)Decrease goodwill $384,000.

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