Plummet Corporation Reported the Book Value of Its Net Assets

question 38

Multiple Choice

Plummet Corporation reported the book value of its net assets at $400,000 when Zenith Corporation acquired 100 percent ownership.The fair value of Plummet's net assets was determined to be $510,000 on that date.
-Based on the preceding information,what amount of goodwill will be reported in consolidated financial statements presented immediately following the combination if Zenith paid $550,000 for the acquisition?

• A)$0
• B)$50,000
• C)$150,000
• D)$40,000

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Definitions:

Variances Assumed

A condition in statistical analysis where it is presumed that the variances of two or more populations are equal, important in certain tests like ANOVA.

Independent Random Samples

Samples selected from a population in such a way that each individual has the same chance of being selected, and the selection of one individual does not affect the selection of another.

Population Means

The average of a set of characteristics (such as age, weight, etc.) of every member of a population.

Tunica Interna

The innermost layer of a blood vessel, consisting of endothelial cells that line the lumen of vessels.