Final-round test: buyer paid 120, target had book equity 80 including 10 prior goodwill, no fair-value adjustments. Calculate goodwill in 30 seconds.

First remove the target's old goodwill because purchase accounting creates new goodwill from the buyer's transaction price. Identifiable net assets are 80 - 10 = 70. New goodwill is purchase price 120 - identifiable net assets 70 = 50. The prior goodwill is not carried forward; it is replaced by acquisition goodwill.