ABC Buys a Smaller Company XYZ for a Negotiated Price

Multiple Choice

ABC buys a smaller company XYZ for a negotiated price of £1 million. XYZs assets are valued at £750,000. Assuming goodwill is amortized over 5 years, the value of goodwill in ABC's Statement of Financial Position at the end of the third year after acquisition will be:

A) £400,000
B) £300,000
C) £150,000
D) £100,000