Question

The company believes that these efforts have increased the fair value of the entire company by $325,000. How much goodwill can the company recognize at the end of the year associated with these expenditures?

Answer 1

Options:

1. $230,000.
2. $80,000.
3. $0.
4. $325,000.

Answer:

The correct option is 0$.

Step-by-step explanation:

These costs are expensed as incurred and are not capitalized as goodwill because they are costs of doing business and not associated with the acquisition of another business.