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:

Brain Stem

The part of the brain connecting the spinal cord with the forebrain and cerebrum, responsible for basic life functions such as breathing and heartbeat.

Choroid Plexus

A network of blood vessels in each ventricle of the brain, responsible for the production of cerebrospinal fluid (CSF).

Cerebellum

A part of the brain located at the back of the skull that coordinates voluntary movements and maintains balance.

Postcentral Gyrus

The primary somatosensory cortex located in the parietal lobe of the brain, responsible for processing tactile and proprioceptive information.