On October 1,20X3,Pole Corporation Paid $450,000 for All of Stick

question 48

Multiple Choice

On October 1,20X3,Pole Corporation paid $450,000 for all of Stick Company's outstanding common stock.On that date,the book values and fair values of Stick's recorded assets and liabilities were as follows:

-Based on the preceding information,the differential implicit in this acquisition is

• A)$0.
• B)$45,000.
• C)$65,000.
• D)$110,000.

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Definitions:

Work in Process Inventory

The cost of unfinished goods in the manufacturing process at a specific point in time.

First-In, First-Out Method

An inventory valuation method where the oldest inventory items are recorded as sold first, leaving the most recently purchased items in inventory.

Equivalent Units

A concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished goods, helpful in calculating costs in process costing systems.

Assembly Department

A division within a manufacturing process where parts are assembled to create a final product.