P Company Acquires All of the Voting Stock of S

Multiple Choice

P Company acquires all of the voting stock of S Company for $930,000 cash. The book values of S Company's assets are $800,000, but the fair values are $840,000 because land has a fair value above its book value. Goodwill from the combination is computed as:

A) $130,000.
B) $90,000.
C) $40,000.
D) $0.