On March 1, 2006, Selig Corporation Acquired for $1,400,000 (Including

Multiple Choice

On March 1, 2006, Selig Corporation acquired for $1,400,000 (including out-of-pocket costs of the business combination) all the net assets of Maree Company. On the date of the combination, the carrying amount of Maree's identifiable net assets was $1,150,000. The current fair value of Maree's inventories was $200,000 less than their carrying amount, and the current fair value of Maree's plant assets was $400,000 larger than their carrying amount. The current fair values of all other identifiable net assets of Maree were equal to their carrying amounts. The journal entry prepared by Selig to record the business combination includes:

A) A debit of $200,000 to Inventories
B) A credit of $400,000 to Plant Assets (net)
C) A debit of $350,000 to Goodwill
D) A credit of $50,000 to Goodwill
E) None of the foregoing