On January 1, 2009, Nichols Company Acquired 80% of Smith

question 32

Multiple Choice

On January 1, 2009, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is: $\begin{array}{lr}\text { Common stock, } \$ 10 \text { par value }(50,000 \text { shares outstanding) } & \$ 500,000 \\\text { Preferred stock, } 6 \% \text { cumulative, } \$ 100 \text { par value, } & \\3,000 \text { shares outstanding } & 300,000 \\\text { Additional paid in capital } & 200,000 \\\text { Retained earnings } & 500,000\\\text { Total stockholders' equity }&\$1,500,000\end{array}$
-Determine the amount and account to be recorded for Nichols' investment in Smith.

• A) $1,324,000 for Investment in Smith.
• B) $1,200,000 for Investment in Smith.
• C) $1,200,000 for Investment in Smith's Common Stock and $124,000 for Investment in Smith's Preferred Stock.
• D) $1,200,000 for Investment in Smith's Common Stock and $120,000 for Investment in Smith's Preferred Stock.
• E) $1,448,000 for Investment in Smith's Common Stock.

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Differentiate between religiosity, faith, belief, and other forms of spiritual expression.

Identify potential barriers to effective communication during spiritual assessment.

Understand the significance of spirituality in care planning and the role of referrals to spiritual counselors.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance payments.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

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