Question

Suppose Dee's just acquired the assets of Flo's Flowers. The book value of Flo's Flowers assets was $68,000 but Dee's paid a total of $75,000. The additional $7,000 paid by Dee's will be recorded on Dee's balance sheet as:a. accounts payable.

b. other current assets.
c. goodwill.
d. property, plant, and equipment.

Answer 1

c. goodwill.

Step-by-step explanation:

Goodwill is an intangible asset that cannot be separated from a company when it is purchased by another company. Goodwill represents qualities that can make a firm profitable in the future, for example: the prestige, the brand, how well-known the firm is, how good its relations with customers are, etc.