Which of the Following Combination Best Demonstrates the Value of Goodwill

question 30

Multiple Choice

Which of the following combination best demonstrates the value of goodwill? I.Purchase consideration of subsidiary
II.Book Value of net assets held by subsidiary
III.Fair value of net identifiable assets
IV.Contingent liabilities

• A) I less II
• B) I less III
• C) I less (II-IV)
• D) I less (III-IV)
• E) None of the given answers.

---

Definitions:

Privity of Contract

The relationship between parties in a contract that confers rights and obligations.

Individual

Referring to a single human being as distinct from a group, class, or family.

Contract

A legally binding agreement between two or more parties that outlines the terms and conditions of a particular arrangement.

Product Misuse

Product Misuse involves using a product in a way not intended by its manufacturer, which can lead to damages or injury not covered under warranties or liability claims.