Use the Following Information to Answer the Question(s)below

question 40

Multiple Choice

Use the following information to answer the question(s) below.
Paris Corporation purchased 80% of the outstanding voting common stock of Sanders Corporation on January 1,2011,at a cost of $400,000.The stockholders' equity of Sanders Corporation on this date consisted of $200,000 of Capital Stock and $100,000 of Retained Earnings.Book values were equal to fair values except for land and inventory.The book value of Sanders' land was $10,000,and fair value was $22,000.The book value of Sanders' inventory was $30,000,and fair value was $25,000.
-Under the entity theory,what amount of goodwill was reported on the consolidated balance sheet at December 31,2011?

• A)$185,000
• B)$191,250
• C)$193,000
• D)$200,000

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Definitions:

Conflicts

Disagreements or disputes arising from differing needs, desires, or views among individuals or groups.

Life Cycle

Describes the sequence of stages that an entity (product, project, or organism) goes through from its inception or birth to its termination or death.

Storming Stage

The second phase of team development, characterized by conflict and struggle as members start to express differing opinions and vie for positions.

Performing Stage

The phase in a team's development characterized by high levels of collaboration, trust, and productivity.