Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 3

AB is a private not-for-profit organization. It acquires YZ, another private not-for-profit organization. The acquisition value is $1 million. YZ has net assets with a book value of $600,000 but a fair value of $700,000. Officials for AB expect that YZ will be predominantly supported by contributions in the future. After the acquisition, what amount of goodwill will be reportedon the combined balance sheet
A) $-0-.
B) $100,000.
C) $300,000.
D) $400,000.