The Following Data Pertains to Questions

question 24

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:
-How much Goodwill was amortized during 2003?

• A)$700
• B)($1,700)
• C)$1,700
• D)None - Goodwill is never amortized.

Account for the initial and subsequent measurement of assets, liabilities, and equity.

Understand the role of dividends in a business and their effect on equity.

Comprehend the purpose and importance of accounting as an information and measurement system.

Understanding forecasting and its importance in making business decisions.

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Definitions:

Volume Of Activity

A measure of the total amount of work performed or output produced in a specific period.

Margin Of Safety

Margin of safety is the difference between actual or projected sales and the sales level at which the business breaks even.

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, indicating how much contributes to covering fixed costs and generating profit.

Pretax Income

Earnings of a company before any tax is applied, calculated by deducting all operating expenses, including cost of goods sold and interest, from revenues.