When a company purchases another company that has existing goodwill and the transaction is accounted for as a stock acquisition, the goodwill should be treated in the following manner:
a. The goodwill on the books of an acquired company should be written off.
b. Goodwill is recorded prior to recording fixed assets.
c. The fair value of the goodwill is ignored in the calculation of goodwill of the new acquisition.
d. Goodwill is treated in a manner consistent with tangible assets.
c
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