Use the Following Information to Answer the Question(s) Below -On January 1,2014,assume the Fair Values of Savannah's Identifiable Assets

question 9

Multiple Choice

Use the following information to answer the question(s) below.

Goldberg Corporation owned a 70% interest in Savannah Corporation on December 31, 2013, and Goldberg's Investment in Savannah account had a balance of $3,900,000. Savannah's stockholders' equity on this date was as follows:
$$\begin{array} { l l } \text { Capital stock, \$10 par value } & \$ 3,000,000 \\\text { Retained Earnings } & \underline { 2,400,000 } \\\text { Total Stockholders' Equity } &\underline { \$ 5,400,000}\end{array}$$
-On January 1,2014,assume the fair values of Savannah's identifiable assets and liabilities equal book values.What is the change in the amount of goodwill associated with the issuance of 80,000 additional shares to Goldberg? (Use four decimal places.)

• A)Increase goodwill $38,176.
• B)Decrease goodwill $38,176.
• C)Increase goodwill $384,000.
• D)Decrease goodwill $384,000.

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Definitions:

UCC Article 4A

Governs the transfer of funds through electronic means between banks, establishing a legal framework for such transactions.

Wholesale Funds Transfers

involves the large-scale movement of money, typically through electronic systems, between banking institutions or within large corporations.

Credit Transactions

Financial agreements where payment is deferred to a future date, including loans, credit card purchases, and lines of credit.

Service Charge

A fee collected for the provision of a service, often added to the cost of services in areas like hospitality, banking, and real estate.