Assuming That the Proprietary Theory Was Applied, What Would Be

question 10

Multiple Choice

Assuming that the Proprietary Theory was applied, what would be the amount of Goodwill appearing on the Consolidated Balance Sheet on the date of acquisition, assuming that Parent purchased 80% of Sub Inc. for $180,000 on August 1, 2018?

• A) $72,000
• B) $88,000
• C) Nil
• D)Cannot be determined from the information given.

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Definitions:

Heuristics

Simplified decision-making strategies or mental shortcuts that people use to make judgments and solve problems quickly and efficiently.

Emotional Appeal

A persuasive technique that seeks to elicit an emotional response from the audience to win support for a particular stance or action.

Discrepancy

A lack of compatibility or agreement between two or more facts, figures, or perceptions.

Expertise

Exceptional skill or knowledge in a particular field or area, acquired through training, study, or practice.