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.