ABC Co Is Acquiring XYZ Inc

question 32

Multiple Choice

ABC Co. is acquiring XYZ Inc. XYZ has the following intangible assets:
Patent on a product that is deemed to have no useful life $10,000.
Customer list with an observable fair value of $50,000.
A 5-year operating lease with favorable terms having a discounted present value of $8,000.
Identifiable research and development costs of $100,000.
ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc?

• A)$168,000
• B)$58,000
• C)$158,000
• D)$150,000

---

Definitions:

Product Requirement

Specifications or criteria that a product must meet related to its design, functionality, and performance.

Resource Decreases

The reduction in the availability or supply of natural, human, or capital resources in an economy or specific market.

Substitute Input

An alternative resource or material that can be used in place of another in the production process to achieve the same outcome.

Labor Resource Market

A market where individuals offer their labor or services for wages to employers who are in need of those services.