On November 30, 2013, Piani Incorporated Purchased for Cash of $25

question 5

Multiple Choice

On November 30, 2013, Piani Incorporated purchased for cash of $25 per share all 400,000 shares of the outstanding common stock of Surge Company.Surge 's balance sheet at November 30, 2013, showed a book value of $8,000,000.Additionally, the fair value of Surge's property, plant, and equipment on November 30, 2013, was $1,200,000 in excess of its book value.What amount, if any, will be shown in the balance sheet caption "Goodwill" in the November 30, 2013, consolidated balance sheet of Piani Incorporated, and its wholly owned subsidiary, Surge Company?

• A)$0.
• B)$800,000.
• C)$1,200,000.
• D)$2,000,000.

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Definitions:

Stop-Payment Order

A request made to a bank to cancel a cheque that has not been processed yet.

Reasonable Opportunity

An equitable standard ensuring individuals have a fair chance to take action or defend themselves within a certain timeframe or under certain conditions.

Alteration

A change or modification in something, often referring to physical changes to documents or objects.

Drawer

In the context of financial instruments, the individual or entity that writes and signs a check, effectively instructing the bank to pay the specified amount to the party named or to the bearer.