Question: Please explain the correct approach for solving this general accounting question. On June 1, Cline Co. paid $800,000 cash for all of the issued and

Please explain the correct approach for solving this general accounting question.

On June 1, Cline Co. paid $800,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn's assets and liabilities on June 1 follow: Cash $150,000 Accounts receivable 180,000 Capitalized software costs 320,000 Goodwill 100,000 Liabilities (130,000) Net assets $620,000 On June 1, Renn's accounts receivable had a fair value of $140,000. Additionally, Renn's in-process research and development was estimated to have a fair value of $200,000. All other items were stated at their fair values. On Clines June 1 consolidated balance sheet, how much is reported for goodwill? a. $320,000. b. $120,000. c. $80,000. d. $20,000

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