The Following Balance Sheets Were Reported on January 1,2016,for Wood

question 38

Essay

The following balance sheets were reported on January 1,2016,for Wood Company and Rose Company:
Required:
Appraisals reveal that the inventory has a fair value $180,000,and the equipment has a current value of $615,000.The book value and fair value of liabilities are the same.Assuming that Wood Company wishes to acquire Rose for cash in an asset acquisition,determine the following cutoff amounts:
A.The purchase price above which Wood would record goodwill.
B.The purchase price at which Wood would record a $50,000 gain.
C.The purchase price below which Wood would obtain a "bargain."
D.The purchase price at which Wood would record $75,000 of goodwill.

---

Definitions:

Public Catastrophe

A large-scale, disastrous event affecting the public such as natural disasters, accidents, or health crises, often requiring emergency response and relief efforts.

CSR Campaign

Stands for Corporate Social Responsibility Campaign, which is an initiative by a business to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.

Reputational Objectives

Goals set by an organization to maintain or improve its standing and perception among stakeholders and the public.

Winston Churchill

A significant historical figure, best known as the Prime Minister of the United Kingdom during World War II known for his leadership qualities and stirring speeches.