6. Burrough Corporation paid $80,000 to acquire all of Helyar Company\'s net ass

Question

6. Burrough Corporation paid $80,000 to acquire all of Helyar Company's net assets. Helyar reported assets with a book value of $60,000 and fair value of $98,000 and liabilities with a book value and fair value of $23,000 on the date of combination. Burrough also paid $3,000 to a search firm for finder's fees related to the acquisition. What amount will be recorded as goodwill by Burrough Corporation while recording its investment in Helyar? (Points : 1)        $0
       $5,000
       $8,000
       $13,000 Question 7.7. Which of the following situations best describes a business combination to be accounted for as a statutory merger? (Points : 1)        Both companies in a combination continue to operate as separate, but related, legal entities.
       Only one of the combining companies survives and the other loses its separate identity.
       Two companies combine to form a new third company, and the original two companies are dissolved.
       One company transfers assets to another company it has created. Question 8.8. A change from the cost method to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires: (Points : 1)        only a footnote disclosure.
       that the cumulative amount of the change be shown as a line item on the income statement, net of tax.
       that the change be accounted for as an unrealized gain included in other comprehensive income.
       retroactive restatement as if the investor always had used the equity method. Question 9.9. From an investor's point of view, a liquidating dividend from an investee is: (Points : 1)        A dividend declared by the investee in excess of its earnings in the current year.
       A dividend declared by the investee in excess of its earnings since acquisition by the investor.
       Any dividend declared by the investee since acquisition.
       A dividend declared by the investee in excess of the investee's retained earnings. Question 10.10. If Push Company owned 51 percent of the outstanding common stock of Shove Company, which reporting method would be appropriate? (Points : 1)        Cost method
       Consolidation
       Equity method
       Merger method 6. Burrough Corporation paid $80,000 to acquire all of Helyar Company's net assets. Helyar reported assets with a book value of $60,000 and fair value of $98,000 and liabilities with a book value and fair value of $23,000 on the date of combination. Burrough also paid $3,000 to a search firm for finder's fees related to the acquisition. What amount will be recorded as goodwill by Burrough Corporation while recording its investment in Helyar? (Points : 1)        $0
       $5,000
       $8,000
       $13,000

Explanation / Answer

Answer:6 $5,000

Answer:7 Only one of the combining companies survives and the other loses its separate identity

Answer:8 Retroactive restatement as if the investor always had used the equity method.

Answer:9 A dividend declared by the investee in excess of its earnings since acquisition by the investor.

Answer:10 Consolidation

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