Gribble Corporation Acquires the Dibble Corporation for $7,200,000

question 47

Multiple Choice

Gribble Corporation acquires the Dibble Corporation for $7,200,000.On appraisal, the assets of Dibble Corporation have a fair market value of $6,800,000.The excess of the purchase price over the fair market value of the assets:

• A)Can be apportioned to the assets based on their relative fair market value.
• B)Is goodwill that is amortized over 15 years.
• C)Is goodwill that is amortized over 40 years.
• D)Must be capitalized until Dibble is sold.

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Definitions:

Economic Interests

The financial stakes or incentives that individuals or entities have in the outcomes of business ventures, policies, or transactions.

False Statements

Misrepresentations or untrue declarations, especially when made deliberately to deceive.

Noncompetition Agreements

Contracts restricting a person's ability to work in a competing business or industry for a specified period after leaving an employer.

Trade Secrets

Confidential information, practices, or processes used by a company that provide it with a competitive advantage.