On December 31, 20X1, Oak Corporation Acquired 100 Percent Ownership

question 65

Multiple Choice

On December 31, 20X1, Oak Corporation acquired 100 percent ownership of Cherry Corporation. On that date, Cherry reported assets and liabilities with books values of $450,000 and $200,000, respectively, common stock outstanding of $150,000, and retained earnings of $100,000. The book values and fair values of Cherry's assets and liabilities were identical except for land which had increased in value by $15,000 and inventories which had decreased by $5,000.
-Company X acquires 100 percent of the voting shares of Company Y for $275,000 on December 31,20X8.The fair value of the net assets of Company X at the date of acquisition was $300,000.This is an example of a(n) :

• A) positive differential.
• B) bargain purchase.
• C) extraordinary loss.
• D) revaluation adjustment.

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Definitions:

Serious Crime

Offenses that are considered particularly harmful to society, often involving violence or significant loss and punished by severe penalties.

Consensus Crime

Crimes that are universally agreed upon as inherently wrong or immoral, generating widespread social agreement on their prohibition.

Sudden Infant Death Syndrome (SIDS)

Sudden Infant Death Syndrome (SIDS) is the unexplained death, usually during sleep, of a seemingly healthy baby less than a year old.

Less Serious Crime

Offenses that are considered less severe in nature, typically punishable by less severe penalties than felonies, such as minor theft or vandalism.