DC Bought Assets A, B, and C for a Total

question 175

Multiple Choice

DC bought Assets A, B, and C for a total cash price of $324,000. The assets were reflected in the accounts of the seller as follows: A, $75,000, B, $60,000, and C, $65,000. The property tax assessments were: A, $15,000, B, $4,000, and C, $6,000. Because the tax assessments were made by untrained people, they bear little resemblance to actual market prices. An independent and competent appraisal showed the following: A, $105,000, B, $70,000, and C, $95,000. DC should record the costs of the assets as follows: $$\begin{array} { | l | l | l | } \hline \text { Asset A } & \text { Asset B } & \text { Asset C } \\\hline 1 \$ 108,000 & \$ 108,000 & \$ 108,000 \\\hline 2126,000 & 84,000 & 114,000 \\\hline 3105,000 & 70,000 & 95,000 \\\hline 475,000 & 60,000 & 65,000 \\\hline\end{array}$$

• A) Choice 1
• B) Choice 2
• C) Choice 3
• D) Choice 4

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Definitions:

Standard Error

Standard error measures the precision of a sample mean estimate of a population mean, indicating how much the sample mean is expected to fluctuate from the true population mean.

Population Average

The mean value of a given characteristic within an entire population.

Sample Mean

The average of all observations in a sample, calculated by summing the values and dividing by the sample size.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it marks the boundary for deciding whether an observed test statistic is extreme.