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Company a Buys Company B for $3,500,000

Question 46

Multiple Choice

Company A buys Company B for $3,500,000. Company A had a pre-merger net worth of $8,000,000; Company B's net worth was $2,000,000. The transaction was accounted for as a pooling of interests. Company A wants to write off any available goodwill as slowly as allowable.
-How much would Company A write off each year?


A) $112,500
B) $37,500
C) $150,000
D) $0

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