Growth Corp Which of the Following Is Not Correct About the Difference

question 61

Multiple Choice

Growth Corp., a publicly accountable entity, purchased a company with the following assets and liabilities for $100,000: $$\begin{array} { | l | r | r | } \hline & \text { Carrying value } & \text { Fair value } \\\hline \text { Inventories } & 18,000 & 17,000 \\\hline \text { Equipment } & 12,000 & 10,000 \\\hline \text { Intangible assets } & 32,000 & 40,000 \\\hline \text { Accounts payable } & 15,000 & 15,000 \\\hline \text { Long-term liabilities } & 10,000 & 15,000 \\\hline\end{array}$$ Which of the following is not correct about the difference between carrying value and fair value?

• A)Long-term liabilities could have a higher value due lower interest rates.
• B)Inventories could have a lower fair value due to obsolescence.
• C)Equipment could have a lower fair value due to decreased productive capacity.
• D)Inventories could have a lower fair value due to accounting errors.

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