The DOC Corporation with a Book Value of $20 Million

question 53

Multiple Choice

The DOC Corporation with a book value of $20 million and a market value of $30 million has merged with the CIC Corporation with a book value of $6 million and a market value of
$8 million at a price of $9 million. If the transaction is a purchase will there be any goodwill, and if so, what is the amount of goodwill?

• A) No goodwill; 0
• B) Yes goodwill; 3
• C) Yes goodwill; 1
• D) Cannot be calculated with the information given

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Definitions:

Democracy

A system of government where the citizens exercise power by voting.

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