Use the Following Information to Answer the Question(s) Below

question 18

Multiple Choice

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

Paris Corporation purchased 80% of the outstanding voting common stock of Sanders Corporation on January 1, 2014, at a cost of $400,000. The stockholders' equity of Sanders Corporation on this date consisted of $200,000 of Capital Stock and $100,000 of Retained Earnings. Book values were equal to fair values except for land and inventory. The book value of Sanders' land was $10,000, and fair value was $22,000. The book value of Sanders' inventory was $30,000, and fair value was $25,000.

-Under the parent company theory,what amount of goodwill was reported on the consolidated balance sheet at December 31,2014?

• A)$148,000
• B)$153,000
• C)$154,400
• D)$160,000

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Definitions:

Capsule

A fibrous, protective covering or layer, frequently surrounding organs or joints.

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