When the investor pays $100,000 to acquire 40% of a company's outstanding voting shares at a time when the fair value of the company's net assets are $175,000, the resulting goodwill amount is $30,000.

Answer the following statement true (T) or false (F)


True

$100,000 ? (175,000 × 40% = 70,000) = $30,000 goodwill

Business

You might also like to view...

Which of the following observations concerning physical evidence is TRUE?

a. It is not useful in fighting fraud cases. b. It is more associated with nonfraud types of crimes. c. It is useful in fraud cases because fraud has physical symptoms. d. It does not involve electronic sources of information.

Business

Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?

A. Cavco is merely fine-tuning its existing strategy to test efficiency. B. Cavco is marshalling resources to support a new strategic initiative. C. Cavco is hampering work climate conducive for good strategy execution. D. Cavco is impeding the efforts to proficiently execute the strategy. E. Cavco is focusing on activities that are a low priority in the strategy execution effort.

Business

Equal protection is the constitutional guarantee:

a. that empowers Congress to regulate equally distributed commerce with foreign Nations, and among the several States, and with the Indian Tribes. b. that laws made in pursuance of the Constitution and all treaties made under the authority of the United States shall be the equally protected as the "supreme law of the land.". c. embodied in the Fourteenth Amendment to the U.S. Constitution. d. that grants and distributes power and responsibilities to national and state governments.

Business

During a one-minute television ad for Adidas, the National Weather Service interrupts to announce a flash flood warning for surrounding counties. Such an occurrence is an example of ____ in the communication process.

A. encoding B. bad luck C. noise D. deflected transmission E. poor implementation

Business