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:

Tendency

An inclination towards a particular type of behavior, action, or thought.

Possibilities

Various potential outcomes or options that may arise from a given situation or set of circumstances.

Simulation Heuristic

A cognitive process people employ to assess the frequency or likelihood of events based on how easily they can imagine those events occurring.

Error

A mistake or inaccuracy, which can occur in reasoning, perception, action, or judgment.