Amber Ltd Purchased 80% of Patel Ltd

question 38

Multiple Choice

Amber Ltd. purchased 80% of Patel Ltd. for $1,000,000. At the time of acquisition, the carrying value of Patel's net identifiable assets was $1,000,000 and the fair value was $1,350,000. What is the amount of the goodwill under the entity method?

• A)$(100,000)
• B)$100,000
• C)$280,000
• D)$350,000

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Definitions:

Piaget

A Swiss psychologist known for his pioneering work in child development, specifically for his theory of cognitive development that describes how children develop intellectual abilities.

Accommodation

A concept in psychology referring to the process of adjusting one’s schemas to incorporate new experiences.

Equilibration

The process in developmental psychology where individuals balance assimilation and accommodation to create stable understanding.

Postconventional

A stage in Kohlberg's theory of moral development where individuals base their moral judgments on principles that transcend societal and legal norms, focusing on universal ethical principles.