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12 Dosmann, Inc., bought all outstanding shares of Lizzi Corporation on January 1, 2016, for $762,000 in cash. This portion of the consideration transferred results
12 Dosmann, Inc., bought all outstanding shares of Lizzi Corporation on January 1, 2016, for $762,000 in cash. This portion of the consideration transferred results in a fair-value allocation of $51,900 to equipment and goodwill of $95,700. At the acquisition date, Dosmann also agrees to pay Lizzi's previous owners an additional $128,000 on January 1, 2018, if Lizzi earns a 10 percent return on the fair value of its assets in 2016 and 2017. Lizzi's profits exceed this threshold in both years. Which of the following is true? 4 points Multiple Choice 8 01:56:07 The fair value of the expected contingent payment increases goodwill at the acquisition date. Consolidated goodwill as of January 1, 2018, increases by $128,000. The $128,000 is recorded as an expense in 2018. O The additional $128,000 payment is a reduction in consolidated retained earnings
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