On January 1, 2021, Nichols Company Acquired 80% of Smith

question 32

Multiple Choice

On January 1, 2021, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. There was no premium in the value of consideration transferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is: Compute the noncontrolling interest in Smith at date of acquisition.

• A) $486,000.
• B) $480,000.
• C) $300,000.
• D) $150,000.
• E) $120,000.

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Definitions:

Psychodynamic Therapies

A group of therapies that focus on uncovering and understanding unconscious motives and conflicts as a path to symptom resolution.

Systematic Desensitization

A behavior therapy that treats anxiety by teaching the client to associate deep relaxation with increasingly intense anxiety-producing situations.

Feared Situation

A scenario or setting that induces a heightened state of fear or anxiety in an individual.

Beck's Cognitive Therapy

A form of psychotherapy developed by Aaron T. Beck that identifies and helps change negative thought patterns and behaviors.