ABC IncAcquired 40% of the Voting Shares of DEF Inc

question 14

Multiple Choice

ABC Inc.acquired 40% of the voting shares of DEF Inc.for $200,000 on January 1,2001.On that date,DEF's Common Shares and Retained Earnings were worth $240,000 and $60,000 respectively.On that date,DEF's Book Values approximated their Fair Values except for DEF's Inventory,which had a market value $50,000 higher than book value,and DEF's Plant & Equipment,which was said to have a market value that was $80,000 higher than its book value.The inventory was subsequently sold to outsiders during the year.The Plant and Equipment had a remaining useful life of ten years from the acquisition date.During the year,DEF earned net income and paid Dividends in the amount of $100,000 and $10,000,respectively.
-What would be the amount of the Acquisition Differential amortization for 2001?

• A)$28,000
• B)$26,000
• C)$130,000
• D)$23,200

---

Definitions:

Prenatal Development

The process of growth and development within the womb from conception to birth.

Infants

Young children from birth to one year of age, focusing on rapid physical and cognitive development during this early life stage.

Standing

The ability or act of supporting oneself in an upright position on the feet, often associated with developmental milestones in humans.

Medulla

A part of the brainstem that controls vital bodily functions such as breathing, heart rate, and blood pressure.