If a Parent Company Acquires a Wholly Owned Subsidiary at an Amount

question 220

Multiple Choice

If a parent company acquires a wholly owned subsidiary at an amount greater than the fair value of the net assets, the excess should be

• A) allocated to expense on the date of acquisition.
• B) allocated to identifiable assets to the extent of their fair values, with any remainder allocated to goodwill.
• C) allocated to goodwill, with any remainder allocated to the identifiable assets.
• D) set up as a liability to the controlling interest.

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Definitions:

Particular Task

A specific duty, job, or function that is assigned or expected to be completed.

Fairness Norm

A social norm that emphasizes fair, equitable treatment and distribution of resources among individuals within a society.

Evolutionary Value

The significance of traits, behaviors, or practices in terms of their contribution to the survival and reproductive success of organisms.

Agrarian Cultures

Societies primarily engaged in agriculture, where farming is the main means of sustenance and influences lifestyle and social structure.