Gabraile Company Acquired Itsy Inc

question 81

Multiple Choice

Gabraile Company acquired Itsy Inc.for a price that was substantially less than the fair value of the identifiable asset acquired.The difference between the fair value of the assets and the bargain purchase price is ________.

• A)recorded as negative goodwill
• B)reported as a gain that increases income from continuing operations
• C)allocated to reduce carrying value for each purchased asset
• D)reported as a gain that increases other comprehensive income

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Definitions:

Nondurable Goods

Items that are consumed or wear out quickly and have a short lifespan, such as food, beverages, and paper products.

Specialty Products

Items that the consumer makes a special effort to search out and buy.

Nondurable Goods

Items that are consumed or wear out rapidly and are expected to last for a short period, such as food, paper products, and most consumer goods.

Durable Goods

Products that are not consumed or destroyed in use and thus have a long life-span, such as cars and appliances.