Suppose Parrot Mfg

question 188

Multiple Choice

Suppose Parrot Mfg. purchases Clint Enterprises for $120 million in cash. For purposes of the acquisition, Clint's fixed assets were appraised at $95 million. Further, assume Clint Enterprises has working capital of $15 million and no long-term debt. If Parrot Mfg. uses the purchase accounting method to account for the acquisition, goodwill of ______________ is created.

• A) $10 million
• B) $15 million
• C) $25 million
• D) $35 million
• E) $80 million

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