1. Smith corp. acquired all of the common stocks of Penn inc. for $124 million. On the date of purchase, Penns identifiable tangible and intangible assets had a fair value of $205 million and a book value of $180 million. Both the fair value and book value of Penns liabilities on the date of purchase were $95 million. What amount of goodwill would smith record as a result of its acquisition of Penn?

A. $70 million

B. $99 million

C. $39 million

D. $14 million

E. $ 25 million

2. Zeta company purchased equipment for $ 360,000 on June 1, 2017. The machinery has an estimated useful life of 5 years and an estimated residual value of $ 60,000. Compute the amount of depreciation expense that Zeta would report in its December 31, 2018 financial statement if it uses the double- declining method to depreciate the equipment.

A. $ 84,000

B. $ 115,200

C. $ 92,000

D. $110,400

3. The following partial information was taken from the balance sheet of levi Corporation:

Shareholders Equity 12/31/2018 12/31/2017

Common stock $5 par, 20 million shares

authorized; 15 million shares issued

and 9 million shares outstanding

at 12/31/2018 and ---------- shares issued

and ---------- shares outstanding at 12/31/17. $75 million $45million

Additional paid in capital on common stock

$520 million $392 million

Retained Earnings 197 million 157 million

Treasury stock, at cost, 6 million shares at

12/31/18 and 4 million shares at 12/31/17 ($72 million) (50 million)

Total shareholders equity (720 million) $544 million

How many shares of Levis common stock were outstanding on 12/31/2017?

1. 5 million
2. 9 million
3. 3 million
4. 11 million
5. 14 million

4. Robertson inc. began operations on January 1, 2018. During 2018, Robertson had the following transactions:

Sold 10,000 shares of common stock for $7 per share

Reported net income of $100,000

Issued $200,000 of bond at face value

Declared $20,000 of cash dividends

Repurchased stock for $30,000 and held it as treasury stock

What is the total balance of Roberts shareholders equity at the end of 2018?

1. $ 100,000
2. $ 180,000
3. $ 160,000
4. $ 320,000
5. $ 120,000