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:

Tax Base

The total amount of assets or income that can be taxed by a government, forming the foundation of its revenue.

Progressive Tax

A tax system in which the tax rate increases as the taxable income increases, placing a larger financial burden on wealthier individuals.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, often increasing as income rises.

Average Tax Rate

The ratio of the total amount of taxes paid to the total taxable income, showing the share of income paid in taxes.