Reference no: EM132859800

Question 1: Wade Company purchased 65 percent of Ten Corporation's voting common stock for $120,000 more than underlying book value, half of which is attributable to goodwill and the other half to land. Wade Company's control over Ten is only temporary. What amount of the purchase differential should be assigned to Land following the acquisition?

A. $ - 0 -

B. $39,000

C. $60,000

D. $120,000

Question 2: On January 1, 2003, Sun acquired 70 percent of Ryan's voting common stock for $450,000, an amount of $30,000 higher than the underlying book value of Ryan's net assets. The fair value of Ryan's net assets was equal to their book values. Any purchase differential is attributable to goodwill. On December 31, 2004, the consolidated balance sheet goodwill should be reported at:

A. zero.

B. the purchase differential.

C.the purchase differential minus the differential amortization.

D.the purchase differential divided by 70 percent.