Lawson CoRecently Acquired All of Graham Inc

Multiple Choice

Lawson Co.recently acquired all of Graham Inc.'s net assets in a business acquisition.The cash purchase price was $5,000,000.Graham's assets and liabilities had the following appraised values immediately prior to the acquisition: land, $1,000,000; buildings, $3,200,000; inventory, $2,000,000; long-term notes payable, for which Lawson Co.assumes payment responsibilities, $2,500,000.How much goodwill will result from this transaction?

A) $700,000.
B) $1,200,000.
C) $1,300,000.
D) $1,800,000.