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.

---

Definitions:

Bacon's Rebellion

A 1676 armed rebellion led by Nathaniel Bacon against the colonial government of Virginia, arising from settlers' frustrations with Native American policies and governmental corruption.

Blacks And Whites

Refers to people of African descent (Blacks) and people of European descent (Whites), often used in discussions about race relations and societal constructs of race.

Virginia

One of the original 13 colonies in the United States, known for its significant role in American history, including being the birthplace of several U.S. presidents.

William Penn

An English Quaker leader and advocate for religious freedom who founded the Province of Pennsylvania, a North American colony, in the late 17th century.