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1.&nbspBullen Inc. acquired 100% of thevoting common stock of V

    1. Bullen Inc. acquired 100% of thevoting common stock of Vicker Inc. on January 1, 20X1. The book value and fairvalue of Vicker’s accounts on that date (prior to creating the combination)follow, along with the book value of Bullen’s accounts: Bullen Book Value VickerBook Value Vicker Fair Value Retained Earnings 1/1/X1 $250,000 $240,000 Cashand Receivables 170,000 70,000 $70,000 Inventory 230,000 170,000 210,000 Land280,000 220,000 240,000 Buildings (net) 480,000 240,000 270,000 Equipment (net120,000 90,000 90,000 Liabilities 650,000 430,000 420,000 Common stock 360,00080,000 Aditional paid-in capital 20,000 40,000 Assume that Bullen paid a totalof $480,000 in cash for all of the shares of Vicker. In addition, Bullen paid$35,000 for secretarial and management time allocated to the acquisitiontransaction. What will be the balance in consolidated goodwill? A. $0. B.$20,000. C. $35,000. D. $55,000. E. $65,000. 2. How are stock issuance costs anddirect combination costs treated in a business combination which is accountedfor as an acquisition when the subsidiary will retain its incorporation?a. Stock issuance costs are a part ofthe acquisition costs, and the direct combination costs are expensedb. Direct combination costs are a partof the acquisition costs, and the stock issuance costs are a reduction toadditional paid-in capital.c. Direct combination costs areexpended and stock issuance costs are a reduction to additional paid-in capitald. Both are treated as part of theacquisition consideration transferrede. Both treated as a reduction toadditional paid in capital

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