The Following Data Pertains to Questions

question 22

Multiple Choice

The following data pertains to questions
Parent and Sub Inc had the following balance sheets on July 31,2007: The Net Incomes for Parent and Sub Inc for the year ended July 31,2007 were $120,000 and $60,000 respectively.
-Assuming once again that the Proprietary Theory was applied,what would be the amount of Goodwill appearing on the Consolidated Balance Sheet on the Date of acquisition,assuming once again that Parent purchased 80% of Sub Inc.for $180,000?

• A)$26,000
• B)$130,000
• C)Nil
• D)Cannot be determined from the information given.

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Definitions:

Statement of Stockholders' Equity

A financial document that outlines the changes in the equity section of a company's balance sheet over a period, reflecting transactions like stock issuance, dividends, and earnings.

Schedule of Total Manufacturing Costs

This is a detailed statement summarizing the total costs—direct materials, direct labor, and manufacturing overhead—incurred during the production of goods in a specific period.

Annual Report

A comprehensive report on a company's activities, financial performance, and strategies throughout the preceding year, intended for shareholders and potential investors.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for regulating the securities industry and enforcing federal securities laws.