Total Shareholders' Equity of Tucker Company Is $4,000,000

Multiple Choice

Total shareholders' equity of Tucker Company is $4,000,000. The fair market value of Tucker's net identifiable assets (assets less liabilities) is $5,000,000. Empire Corporation makes an offer to purchase Tucker's entire business for $5,800,000. In this situation:

A) Tucker Company should report goodwill of $800,000 in its statement of financial position.
B) Tucker Company should report goodwill of $1,800,000 in its statement of financial position.
C) Empire Corporation is willing to pay $1,800,000 for goodwill generated by Tucker, and Empire will report this goodwill in its statement of financial position if the purchase is finalized.
D) Empire Corporation is willing to pay $800,000 for goodwill generated by Tucker, and Empire will report this goodwill in its statement of financial position if the purchase is finalized.