On January 1, 2013, Hanson Purchased an Additional 9,000 Shares

question 23

Multiple Choice

On January 1, 2013, Hanson purchased an additional 9,000 shares of Marvin Inc. on the open market for $45,000. On this date, Marvin's book values were equal to its fair market values with the exception of the company's equipment, which is now thought to be undervalued by $60,000. Moreover, the equipment's estimated useful life was revised to 5 years on this date. Marvin's net Income and dividends for 2012 and 2013 are as follows: Marvin's goodwill suffered an impairment loss of $5,000 during 2012. Hanson Inc. uses the equity method to account for its investment in Marvin Inc. What is the amount of goodwill arising from Hanson's January 1, 2012 acquisition?

• A) $50,000.
• B) $60,000.
• C) $80,000.
• D) $200,000.

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Definitions:

Personal Development

Involves activities that improve awareness and identity, develop talents and potential, enhance the quality of life, and contribute to the realization of dreams and aspirations.

Drug Abuse

The habitual taking of addictive or illegal drugs in a manner that leads to a range of social, emotional, and physical problems.

Behavior Therapy

A type of psychotherapy that aims to change potentially self-destructive or unhealthy behaviors through conditioning techniques.

Gestalt Therapy

A form of psychotherapy that emphasizes personal responsibility and focuses on the individual's experience in the present moment, the therapist-client relationship, the environmental and social contexts of a person’s life, and the self-regulating adjustments people make as a result of their overall situation.