Big Guy Inc

question 9

Multiple Choice

Big Guy Inc. purchased 80% of the outstanding voting shares of Humble Corp. for $360,000 on July 1, 2011. On that date, Humble Corp. had Common Stock and Retained Earnings worth $180,000 and $90,000, respectively. The Equipment had a remaining useful life of 5 years from the date of acquisition. Humble's Bonds mature on July 1, 2021. Both companies use straight line amortization, and no salvage value is assumed for assets. The trademark is assumed to have an indefinite useful life. Goodwill is tested annually for impairment. The Balance Sheets of Both Companies, as well as Humble's Fair Market Values on the date of acquisition are disclosed below: The following are the Financial Statements for both companies for the fiscal year ended June 30, 2014:

• A) $9,600.
• B) $12,000.
• C) $360,000.
• D) The investment in Humble Account would not appear on the Consolidated Balance Sheet.

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Definitions:

Relaxation Training

Techniques or exercises designed to reduce stress and anxiety, promoting physical and mental relaxation.

Biofeedback Training

A therapy technique that teaches individuals to control physiological processes such as heart rate or muscle tension through real-time feedback.

Behavioral Medicine

A field that combines psychological and physical interventions to treat or prevent medical problems.

Muscles

Tissues in the body that have the ability to contract, making movement possible.