Azimuth Company Purchases a Small Business for $500,000

question 107

Multiple Choice

Azimuth Company purchases a small business for $500,000.The market value of the business's assets are $850,000,and the market value of the liabilities are $400,000.How much goodwill should Azimuth record?

• A) None
• B) $500,000
• C) $450,000
• D) $50,000

---

Definitions:

Factor Analysis

A statistical method used to describe variability among observed, correlated variables in terms of potentially lower number of unobserved variables, called factors.

Variables

Elements, features, or factors that are liable to vary or change.

Correlations

Statistical measures that describe the extent to which two variables change together, but not necessarily indicating that one causes the other.

Intelligence Tests

Standardized assessments designed to measure a person's cognitive abilities and potential.