On January 1,2012,a Parent Company Acquired All of the Stock

question 29

Multiple Choice

On January 1,2012,a parent company acquired all of the stock of a subsidiary.The following data is available:
$\begin{array}{ll}&\text { Parent Company } & \text { Subsidiary } \\ \text {Total assets }&\$ 650 & \$ 400 \\ \text { Total liabilities }&\$ 200 & \$ 190 \\ \text { Total stockholders' equity}&\$ 450 & \$ 210\end{array}$
The acquisition by the parent company represents a 100 percent interest in the subsidiary.On January 1,2012,the fair value of the subsidiary's assets and liabilities are equal to their book value.The parent company paid $250 for the 100 percent interest in the subsidiary.What amount of goodwill is implied in the purchase?

• A) $0
• B) $10
• C) $40
• D) $200

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Definitions:

Altered States

Variations from an individual's normal mental state, which can be induced by various methods such as meditation, drug use, or hypnosis, often resulting in different perceptions or consciousness.

Consciousness

Consciousness is the state of being aware of and able to think about one's own existence, sensations, thoughts, surroundings, and experiences.

Daydreaming

A short-term detachment from one's immediate surroundings, during which a person's attention is focused on internal thoughts or fantasies.

Altered State

A condition of consciousness that is significantly different from normal waking consciousness, often induced by methods such as meditation, drugs, or hypnosis.