The Following Information Pertains to Questions

question 22

Multiple Choice

The following information pertains to questions
On January 1,2009,Hanson Inc.purchased 54,000 of Marvin Inc.'s 90,000 outstanding voting shares for $240,000.On that date,Marvin's common stock and retained earnings were valued at $60,000 and $90,000 respectively.Marvin's book values approximated its fair values on the acquisition date with the exception of the company's equipment,which was estimated to have a fair market value that was $50,000 in excess of its recorded book value.The equipment was estimated to have a useful life of eight years.Both companies use straight line amortization exclusively.
On January 1,2010,Hanson purchased an additional 9,000 shares of Marvin Inc.on the open market for $45,000.On this date,Marvin's book values were equal to its fair market values with the exception of the company's equipment,which is now thought to be undervalued by $60,000.Moreover,the equipment's estimated useful life was revised to 4 years on this date.
Marvin's net Income and dividends for 2009 and 2010 are as follows: Marvin's goodwill was subject to an impairment loss of $5,000 during 2009.Hanson ABC Inc.uses the equity method to account for its investment in Marvin Inc.
-What is the amount of the acquisition differential amortization for 2010?

• A)$1,500
• B)$7,750
• C)$6,500
• D)$16,500

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Definitions:

Listening Barrier

Anything that interferes with the ability to accurately perceive and interpret messages during the listening process.

Social Decentering

The cognitive process in which an individual strives to understand another person's perspective or point of view.

Interpersonal Communication

The process by which people exchange information, feelings, and meaning through verbal and nonverbal messages in face-to-face interactions.

Emotional Noise

Distractions or disturbances caused by strong emotions that interfere with the ability to listen or communicate effectively.