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E. Just prior to its sale to BigBuyer, SmallFishs Market Value Balance Sheet showssetuv - $200MM, and Liabilities $100MM. BigBuyer then purchases the firm for $150MM. How much, ifany, cause Goodwill to change for BigBuyer? a. Decrease of $50MM b. Decrease of $100MM. c. Increase of $25MM. d. Increase of $50MM.
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Answer #1
Goodwill = Purchase price - (Market value of assets-Liabilities) = 150-(200-100) = $50 MM
Option D increase of $50 MM is the correct option.
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