On February 5, Pryor Corporation Paid $1,600,000 for All the Issued

Multiple Choice

On February 5, Pryor Corporation paid $1,600,000 for all the issued and outstanding common stock of Shaw, Inc., in a transaction properly accounted for as an acquisition.The book values and fair values of Shaw's assets and liabilities on February 5 were as follows $\begin{array}{lrr} & \text { Book Value } & \text { Fair Value } \\\text { Cash } & \$ 160,000 & \$ 160,000 \\\text { Receivables (net) } & 180,000 & 180,000 \\\text { Inventory } & 315,000 & 300,000 \\\text { Plant and equipment (net) } & 820,000 & 920,000 \\\text { Liabilities } & (350,000) & (350,000) \\\text { Net assets } & \$ 1,125,000 & \$ 1,210,000\end{array}$ What is the amount of goodwill resulting from the business combination?

A) $-0-.
B) $475,000.
C) $85,000.
D) $390,000.