On March 31, 2006, Preston Corporation Acquired for Cash at $25

Multiple Choice

On March 31, 2006, Preston Corporation acquired for cash at $25 a share all 300,000 shares of the outstanding common stock of Sexton Company. Out-of-pocket costs of the business combination may be disregarded. Sexton's balance sheet on March 31, 2006, had net assets of $6,000,000. Additionally, the current fair value of Preston's plant assets on March 31, 2006, was $800,000 in excess of carrying amount. The amount to be shown for the balance sheet caption "Goodwill" in the March 31, 2006, consolidated balance sheet of Preston Corporation and its wholly owned subsidiary, Sexton Company, is:

A) $0
B) $700,000
C) $800,000
D) $1,500,000
E) Some other amount