Cheers Acquired 100% of Tapp's Shares for $150,000

question 15

Multiple Choice

Cheers acquired 100% of Tapp's shares for $150,000.On the acquisition date,the fair value of the current assets and the net capital assets were $104,000 and $216,000 respectively.The fair value of the liabilities equalled their book value.What is the amount of goodwill created in this acquisition?

• A)$(24,000)
• B)$ 0
• C)$18,000
• D)$40,000

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Definitions:

Consulting Fees-Revenue

Income earned by an individual or a company for providing professional advice or services to clients.

Cash

A form of liquid asset that consists of currency, including coins and banknotes, which can be used immediately for transactions.

Supplies Expense

The cost associated with consumable supplies used during an accounting period in the operation of a business.

Supplies

Items used in the day-to-day operations of a business, such as office supplies, which are essential for conducting business activities.