The DOC Corporation with a Book Value of $20 Million

question 73

Multiple Choice

The DOC Corporation with a book value of $20 million and a market value of $30 million has acquired the CIC Corporation with a book value of $6 million and a market value of $8 million at a price of $9 million. If the transaction is a purchase, will there be any goodwill, and if so, what is the amount of goodwill?

• A)No goodwill; 0
• B)Yes, goodwill; 3
• C)Yes, goodwill; 1
• D)Goodwill cannot be calculated with the information given.

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Definitions:

Managerial Jobs

Positions in an organization responsible for directing and overseeing the work of other employees, making strategic decisions, and ensuring the alignment of team efforts with organizational goals.

Core Job Dimension

Fundamental aspects of a job that affect an employee's motivation and satisfaction, such as skill variety, task identity, and autonomy.

Internal Work Motivation

The personal drive or intrinsic desire to undertake work tasks effectively, originating from within an individual.

Critical Psychological State

A mental condition integral to the Job Characteristics Model that impacts an employee's motivation, satisfaction, and performance based on core job dimensions.