In 2011, First Company Purchased Second Company for $16,000,000 Cash

question 71

Multiple Choice

In 2011, First Company purchased Second Company for $16,000,000 cash. At the time of purchase Second Company had $18,500,000 in assets and liabilities of $11,000,000. The 2011 balance sheet for First Company should show goodwill of:

• A)$10,500,000.
• B)$8,500,000.
• C)$3,500,000.
• D)$0.

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Definitions:

Populated State

A state or region that has a high density of human population.

Urban Areas

Regions characterized by high population density, advanced infrastructure, and significant economic activities, typically including cities and towns.

Mass Consumption

The widespread purchase and use of goods and services by a large number of people, characteristic of developed economies with high levels of consumer spending.

Patriotic Act

Likely refers to the USA PATRIOT Act, a significant legislative act passed in 2001 aimed at enhancing domestic security through expanded surveillance and investigative powers to prevent terrorism.