Big Company Acquired the Following Assets and Liabilities of Little

question 5

Multiple Choice

Big Company acquired the following assets and liabilities of Little Company (fair values listed below) for $470,000 cash.
Assuming these items are all recorded at their acquisition date fair values,what additional item needs to be recorded and how will it be accounted for in the future?

• A)$30,000 Goodwill,capitalized and tested for impairment
• B)$30,000 Bargain purchase,recognized in current earnings
• C)$30,000 Bargain purchase,capitalized and recognized over time
• D)$30,000 Goodwill,capitalized and amortized over time

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Definitions:

Moral Values

Principles or standards of behavior that are considered important by a society or individual in distinguishing right from wrong.

Executive Power

is the authority held by individuals in executive positions to make decisions, set policies, and oversee the operations of an organization.

Independent Board

A group of directors in an organization who do not have any conflicts of interest and are not part of the day-to-day management, ensuring unbiased oversight and decision-making.

Organizational Performance

The measure of how efficiently and effectively a company or organization reaches its goals and objectives.