Use the following facts for Multiple Choice problems 27 and 28 (each question is independent of the other):

On July 1, 2016, an acquiring company paid $1,275,000 for 100% of the outstanding common stock of an investee company in a transaction that qualifies as a business combination. Immediately preceding the trans-action, the investee company had the following condensed balance sheet:

Pre-acquisition amounts reported

On investees balance sheet

Current assets $200,000

Property and equipment, net 1,500,000

Liabilities 800,000

Equity 900,000

The acquisition-date fair value of the property and equipment was $230,000 more than its carrying amount. For all other assets and liabilities, the pre-acquisition amounts reported on investees balance sheet were equal to their respective fair values.

27. What amount of goodwill related to the acquisition of the investee must the acquiring company report in pre-consolidation parent-only balance sheet immediately following the acquisition of investee company common stock?

A. $375,000

B. $220,000

C. $145,000

D. $0

28. What amount of goodwill related to the acquisition of the investee must the acquiring company report in its consolidated balance sheet immediately following the acquisition of investee company common stock?

A. $375,000

B. $220,000

C. $145,000

D. $0