Company a Buys Company B for $3,500,000

question 24

Multiple Choice

Company A buys Company B for $3,500,000. Company A had a pre-merger net worth of $8,000,000; Company B's net worth was $2,000,000. The transaction was accounted for as a pooling of interests. Company A wants to write off any available goodwill as slowly as allowable.
-Over how many years can goodwill be written off for accounting purposes?

• A) 0 years
• B) 20 years
• C) 40 years
• D) 50 years

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Definitions:

Attribution Theory

A psychological theory that explains how individuals infer the causes of their own and others' behavior.

Systems Theory

An interdisciplinary theory that studies complex systems in numerous fields, focusing on the interactions and interdependencies within systemic structures.

Assertiveness

The quality of being self-assured and confidently expressing one's rights, needs, and opinions without infringing on the rights of others.

Cooperation

The act of working together towards a common goal or benefit, often involving sharing knowledge, resources, or efforts.