Dodd Co Acquired 75% of the Common Stock of Wallace Corp

question 42

Multiple Choice

Dodd Co. acquired 75% of the common stock of Wallace Corp. for $1,800,000. The fair value of Wallace's net assets was $2,100,000, and the book value was $1,900,000. The noncontrolling interest shares of Wallace Corp. are not actively traded.What is the total amount of goodwill recognized at the date of acquisition?

• A) $0.
• B) $100,000.
• C) $200,000.
• D) $300,000.
• E) $700,000.

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved in emotions and drives, including fear, pleasure, and anger.

Stress Hormones

Chemicals released in the body in response to stress, such as cortisol and adrenaline, that prepare the body to act in a fight-or-flight scenario.

Vulnerable

The state of being susceptible to physical or emotional harm or injury.

Learning Perspective

An approach in psychology that emphasizes the effects of experience on behavior, suggesting that behaviors are learned rather than innate.