P Company Paid $500,000 for 100% of the Net Assets

question 4

Multiple Choice

P Company paid $500,000 for 100% of the net assets (assets less liabilities) of S Company. The current value of S Company's net assets was only $475,000. As a result of this acquisition, P Company must recognize

• A)negative goodwill.
• B)goodwill.
• C)gain.
• D)loss.

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Definitions:

Accountant

A professional responsible for managing and examining financial records, and providing advice on fiscal matters.

Accounting Partnership

A business arrangement where two or more individuals engage in an accounting practice together, sharing profits, losses, and responsibilities.

Waiting Room

A designated area where people sit or stand until the event or appointment for which they are waiting begins.

Office Chairs

Seats designed specifically for use in a workplace environment to enhance comfort and productivity.