The Fair Market Value of Lewis Company's Net Identifiable Assets

question 5

Multiple Choice

The fair market value of Lewis Company's net identifiable assets is $5,000,000.Martin Corporation purchases Lewis' entire business for $5,800,000.Which of the following statements is not correct?

• A)Martin Corporation paid $800,000 for goodwill generated by Lewis Company.
• B)Martin feels that Lewis Company has the ability to generate earnings in excess of a normal return on net identifiable assets.
• C)Martin will record amortization expense over a period not to exceed 40 years.
• D)Martin Corporation will record $800,000 to goodwill,an intangible asset,which will be reported in its balance sheet.

---

Definitions:

Egocentric Speech

Speech that is focused on the self, often observed in young children, reflecting their limited ability to take the perspective of others.

True Dialogue

Genuine, open exchange of ideas and thoughts where participants actively listen and respond to each other with respect and understanding.

Conversational Partners

Individuals engaged in verbal interaction, where they exchange ideas, information, or feelings through spoken words.

Language Acquisition Device

A hypothetical module of the human mind proposed by Noam Chomsky, posited to account for children's innate capacity for language acquisition.