Nancy Howard, owner of Howard Corporation, is negotiating for the purchase of Innovative Technology. The balance sheet of Innovative Technology has Cash of $40,000; Land of $100,000; Building of $250,000; Equipment of $142,000; Total Liabilities of $400,000. Both Howard Corporation and Innovative Technology agree that Land is undervalued by $20,000 and Equipment is overvalued by $7,000. Innovative Technology agrees to sell the company to Howard Corporation for $200,000. The amount of goodwill that should be recognized in the purchase of Innovative Technology will be which of the following:
$80,000
$75,000
$60,000
$55,000