Simco's Shaving Products Division Was Acquired Over Ten Years Ago

question 29

Multiple Choice

Simco's shaving products division was acquired over ten years ago in a purchase transaction by BlizzardCraft.The related goodwill was amortized until 2002 and $4.5 million remained on the books thereafter.In 2008,Simco's production machinery was assessed for impairment as a long-lived asset because of obsolescence issues.What relationship will the auditors most likely make between the facts stated above?

• A)BlizzardCraft erroneously treated the acquisition of Simco as a purchase transaction when it should have been a pooling of interests.
• B)Simco should not have amortized goodwill previous to 2002.
• C)The goodwill related to Simco may have been impaired during 2008.
• D)Simco's goodwill should have been written off when purchased by BlizzardCraft in a one-time transaction.

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Definitions:

Ex-Slave

A person who was formerly enslaved, especially in the context of American history prior to the abolition of slavery in 1865.

Black Abolitionists

Black Abolitionists were African American leaders and activists who played a significant role in the movement to abolish slavery in the United States.

Social Position

The rank or status of an individual within the hierarchy of society, often determined by factors such as occupation, income, education, and family background.

Slave-Labor System

An economic system that relies on the forced labor of enslaved individuals, historically used in the Americas for agricultural and other labor-intensive activities.