1. both consolidation entries [A] and [S] require us to plug in "investment" account to balance the entries. Which of the following additional consolidation entires does not use this "plug-in" approach?

A) Entry [I]

B) Entry [D]

C) Entry [E]

D) All of them require plugging in "investment"

2. In initial analysis, we compare the book values (B.V.) with fair values (F.V.) for both assets and liabilities. The excess of fair value over book value (the Column titled "difference" or "allocation" in our PPT) can be positive or negative depending on (1) which is larger (B.V. vs. F.V.) and (2) asset or liability. It can be summarized in the following matrix.

	F.V. > B.V	F.V. < B.V
Assets	Positive	Negative
Liabilities	Negative	Positive

Based on the above matrix, finish the following part of the initial analysis. Values presented are as of the acquisition day.

	Book Values	Fair Values	Difference
Current Assets	$100,000	$100,000	$0
Trademarks (indefinite life)	100,000	200,000	+100,000
Patent (10-year remaining life)	150,000	250,000	(1) ?
Equipment	500,000	300,000	(2) ?
Accounts Payable	(110,000)	(90,000)	(3) ?
Notes Payable	(1,000,000)	(1,010,000)	(4) ?

A) (1) +100,000; (2) (200,000); (3) (20,000); (4) +10,000

B) (1) +100,000; (2) (200,000); (3) +20,000; (4) (10,000)

C) (1) (100,000); (2) +200,000; (3) (20,000); (4) +10,000

D) (1) (100,000); (2) +200,000; (3) +20,000; (4) (10,000)