On January 1, 2016, Poole Company Purchased 75% of the Common

question 27

Multiple Choice

On January 1, 2016, Poole Company purchased 75% of the common stock of Swimmer Company. Separate balance sheet data for the companies at the combination date are given below: Determine below what the consolidated balance would be for each of the requested accounts on January 2, 2016. What amount of goodwill will be reported?

• A) $26,667.
• B) $20,000.
• C) $42,000.
• D) $86,667.

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Definitions:

Tender

The act of performing a contract or the offer of payment of money due under a contract.

Doctrine Of Frustration

A legal principle that allows a contract to be discharged when an unforeseen event makes contractual obligations impossible to perform, or fundamentally changes the party’s principal purpose for entering into the contract.

Common Law

A legal system characterized by judicial decisions creating precedent, originating in England and forming the basis of legal systems in many English-speaking countries.

Clause

A specific provision or section within a contract or legal document that stipulates particular terms, conditions, or obligations.