1. If a parent offers a contingency based on earnings: A) The amounts determined are always added to the purchase price of the acquisition. B) There is concern from subsidiary's original stockholders that the purchase price offered by parent might be too high. C) Subsidiary's original stockholders might be entitled to additional payments. D) Parent's original stockholders might be entitled to additional payments 2. When a partnership incorporates, the partners A) B) C) D) Must sell all the assets of the partnership. Sell the partnership to another company. Transfer their ownership capital to stockholders' equity. Cannot keep the partnership books. 3. A newly acquired subsidiary has pre-existing goodwill on its books. The parent company's consolidated balance sheet will: A) treat the goodwill the same as other intangible assets of the acquired company. B) not show any value for the subsidiary's pre-existing goodwill. C) D) do an impairment test to see if any of it has been impaired. will always show the pre-existing goodwill of the subsidiary at its book value. 4. Which of the following is a characteristic of a limited partnership? A) Limited partners have an active involvement in the management of the partnership. B) Only general partners have unlimited liability C) Only limited partners have unlimited liability D) All of the above are characteristics. 5. P Company acquired 75 percent of the common stock of S Corporation on December 31, 2017. On the date of acquisition, P held land with a book value of $150,000 and a fair value of $300,000; S held land with a book value of $100,000 and fair value of $400,000. What amount would land be reported in the consolidated balance sheet prepared immediately after the combination? A) $375,000 B) $550,000 C) $650,000 D) $500,000