Falter Acquired 100% of Krystal's Net Assets for $300,000 A)$(48,000)
B)$ 0
C)$36,000
D)$80,000

question 3

Multiple Choice

Falter acquired 100% of Krystal's net assets for $300,000. On the acquisition date, the fair value of the current assets and the net capital assets were $208,000 and $432,000 respectively. The fair value of the liabilities equalled their book value. What is the amount of goodwill created in this acquisition? $\begin{array}{|l|r|r|}\hline& \text { Falter Co. } & \text { Kustal Ltd. } \\\hline \text { Current assets } & \$ 480,000 & \$ 80,000 \\\hline \text { Net capital assets } & \underline{800,000} & \underline{480,000} \\\hline & \$ 1,280,000 & \$ 560,000 \\\hline \text { Current liabilities } & \$ 336,000 & \$ 280,000 \\\hline \text { Long-term debt } & 160,000 & 96,000 \\\hline \text { Share capital } & 720,000 & 1,000,000 \\\hline \text { Retained earnings } & \underline{64,000} & \underline{84,000} \\\hline & \$ \underline{1,280,000} & \$ \underline{560,000} \\\hline\end{array}$

• A)$(48,000)
• B)$ 0
• C)$36,000
• D)$80,000

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Definitions:

Freudian Therapist

A psychotherapist who follows the principles of Sigmund Freud, emphasizing the influence of the unconscious mind, childhood experiences, and defense mechanisms on behavior.

Behavioral Problem

An issue reflected through actions that are outside expected norms, often indicating underlying psychological or emotional distress.

Weight Problem

Issues related to being over or under the optimal weight, often affecting physical health, mental well-being, and societal perceptions.

Freudian Theory

A set of psychological theories and therapeutic methods developed by Sigmund Freud, focusing on unconscious motives and conflicts.