The Following Data Pertains to Questions

question 56

Multiple Choice

The following data pertains to questions
Parent and Sub Inc had the following balance sheets on December 31,2008: On January 1,2009 Parent purchased all of Sub Inc's Common Shares for $40,000 in cash.On that date,Sub's Current Assets and Fixed Assets were worth $26,000 and $54,000,respectively.Assuming that Consolidated Financial Statements were prepared on that date,answer the following:
-The Goodwill arising from this Business Combination would be:

• A)$7,000
• B)($17,000)
• C)$17,000
• D)$120,000

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Definitions:

Quantum Meruit

A legal principle that means "as much as he deserves," used to determine fair compensation for services rendered without a specific contract.

Estoppel

A legal principle that prevents a person from arguing something contrary to a claim or a statement they have previously made and on which another party has relied.

Consideration

Something of value that is given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Charitable Pledges

Promises to donate a specific amount of money or resources to a charity or non-profit organization.