Use the Following Information for Questions

question 45

Multiple Choice

Use the following information for questions
Jessup Corp.will acquire a controlling stake in the outstanding shares of Parasol Inc.for
$9.2 million in cash.
-Assuming the fair value of Parasol's net-assets is $10.2 million, and Jessup acquired a 75% share, goodwill can be calculated as

• A)$1,243,000
• B)$1,000,000
• C)$1,550,000
• D)$750,000

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Definitions:

Sales Returns

Goods returned by customers to the seller after the sale, which result in a reduction of revenue previously recognized.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

Periodic Inventory System

An inventory accounting system where the inventory count is physically conducted at specific intervals, typically at the end of an accounting period.

Net Method

An accounting method that records purchases and sales of inventory net of discounts at the time of transaction.