In Accounting for an Acquisition Using the Pooling of Interests

question 36

Multiple Choice

In accounting for an acquisition using the pooling of interests method,which of the following statements is true?

• A)In subsequent periods,the subsidiary's retained earnings is always eliminated by the amount at date of acquisition.
• B)The investment account will always equal the book value of the subsidiary at any date.
• C)Any goodwill will have an indefinite life.
• D)Any goodwill must be amortized over 20 years.
• E)The excess of fair value over book value of the net assets of a subsidiary is amortized over their useful lives.

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