Suppose Dee's Just Acquired the Assets of Flo's Flowers

question 34

Multiple Choice

Suppose Dee's just acquired the assets of Flo's Flowers.The book value of Flo's Flowers assets was $68,000 but Dee's paid a total of $75,000.The additional $7,000 paid by Dee's will be recorded on Dee's balance sheet as:

• A) accounts payable.
• B) goodwill.
• C) other current assets.
• D) property, plant, and equipment.

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Definitions:

Minor

An individual under the age of legal adulthood, typically under 18, who has limited legal rights and capacities.

Voidable Title

A title to property or goods that can be rendered null and void due to certain conditions, such as fraud or misrepresentation.

Good Faith Purchaser

is a person who buys property without notice of any other party's claim to the title of the property and for a fair value.

Consequential Damages

Losses that arise not directly from a breach of contract but as a foreseeable result of the breach.