On June 30, 2014, Diode Inc purchased for cash at $50 per share all 150,000 shares of outstanding common stock of Moore Company. Moore's balance sheet at June 30, 2014, showed net assets with a book value of $6,000,000 . The fair value of Moore's property, plant, and equipment on June 30, 2014, was $800,000 in excess of its book value. What amount, if any, will be recorded by Diode as goodwill on
the date of purchase?
a. $0
b. $700,000
c. $800,000
d. $1,500,000
B
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The reserve requirement is 0 percent on the first $6.0 million in transaction deposits, 3 percent on amounts between $6.0 million and $42.1 million, and 10 percent on amounts above $42.1 million.The First Bank of Boston has the following assets and liabilities (all amounts in millions of dollars):
Assets Reserves$5.0 Loans$345.0 Securities$70.0 Liabilities + Capital Transaction deposits$75.0 Nontransaction deposits$315.0 Equity capital$30.0 ? a.Calculate the bank's excess reserves. Show your work. b.Suppose First Bank makes a loan to a customer equal to the amount of the excess reserves you found in part a. Calculate the bank's excess reserves before the customer spends the proceeds of the loan. Show your work. c.Now suppose the customer spends the proceeds of the loan. Calculate the bank's excess reserves. Show your work. What will be an ideal response?
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When the CPA is not independent with respect to a compilation client, what should the CPA do?
a. The CPA must not accept the engagement. b. The CPA must include a separate paragraph in the report stating the lack of independence. c. The CPA must change the engagement to a review engagement. d. The CPA must issue a disclaimer.