Tarkington Beers,Inc

Multiple Choice

Tarkington Beers,Inc.purchased the most popular and well-known pub in a college town.Its purchase price was $1,200,000.The appraisers determined that the land should be valued at $400,000,the building at $500,000,and the equipment at $200,000.Which of the following statements is correct?

A) Tarkington Beers,Inc.should record only the appraised value of the assets.
B) Tarkington Beers,Inc.needs to adjust the value of the assets in proportion to their appraised value so that the total of the assets equals the purchase price.
C) Tarkington Beers,Inc.paid too much for the business and needs to record a loss.
D) Tarkington Beers,Inc.needs to record goodwill of $100,000.