On January 1, 2014, Red Company Purchased Patriot Shop for $400,000

Multiple Choice

On January 1, 2014, Red Company purchased Patriot Shop for $400,000 cash in a merger transaction. Red Company received the assets listed below and assumed accounts payable owed by Patriot to its suppliers in the amount of $30,000. $\begin{array}{lrr}&\text { Book Value per }&\text { Fair }\\&\text { Patriot's Books }&\text { value }\\\text { Inventory } & \$ 300,000 & \$ 280,000 \\\text { Furniture and fixtures } & 60,000 & 73,000 \\\text { Other assets } & 10,000 & 32,000\end{array}$ What amount of goodwill will be recorded in the transaction?

A) $35,000.
B) $60,000.
C) $50,000.
D) $45,000.