Wilkins Inc

question 51

Multiple Choice

Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1, 2021. The book value and fair value of Granger's accounts on that date (prior to creating the combination) are as follows, along with the book value of Wilkins's accounts: Assume that Wilkins paid a total of $500,000 in cash for all of the shares of Granger. In addition, Wilkins paid $42,000 for secretarial and management time allocated to the acquisition transaction. What will be the balance in consolidated goodwill?

• A) $0.
• B) $20,000.
• C) $40,000.
• D) $42,000.
• E) $82,000.

Analyze and prepare a balance sheet from given account balances and transactions.

Understand the principles guiding the recording of assets and their valuation.

Recognize the importance of ethical values in accounting.

Distinguish between the different financing and investing activities of a business.

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Definitions:

Hydrogen Bond

A slight attraction between two molecules stemming from the electrostatic attraction that occurs between a proton in one molecule and an atom with strong electronegativity in the counterpart.

Atoms

The basic units of matter and the defining structure of elements, consisting of a nucleus surrounded by electrons.

Strong Acids

Substances that completely dissociate into ions in water, releasing a large amount of hydrogen ions.

Weak Acids

Acids that do not fully dissociate in solution, resulting in a less acidic solution compared to strong acids.