If a Parent Company Acquires Wholly Owned Subsidiary at an Amount

question 48

Multiple Choice

If a parent company acquires wholly owned subsidiary at an amount greater than the book value, 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:

Standard Normal Variable

A random variable that has been normalized so that it has a mean of 0 and a standard deviation of 1, following the standard normal distribution.

Symmetrical Area

A region in a distribution curve where data are evenly distributed on both sides of a central point, indicating balance and uniformity.

Z Score

Another term for Z-score, indicating how far, in standard deviations, a data point is from the average of a set of data.

Standard Normal Random Variable

Represents a normal distribution with a mean of zero and a standard deviation of one, used in many statistical applications.