14. Apple Inc. purchased a 70% interest in the Banana Company for $490,000 on January 1, 20X3, when Banana Company had the following stockholders' equity:

Common stock, $10 par	$100,000
Paid-in capital in excess of par	250,000
Retained earnings	150,000

At the time of Apples purchase, Banana Company was an 80% owner of the Carrot Company. Also on that date, Carrot Company has a machine that has a market value in excess of book value of $20,000. There is no difference between book and market value for any Banana Company assets. The goodwill that would result from this purchase is ____.

a. $180,000

b. $140,000

c $184,000

d. $126,000

15. Which of the following situations is viewed as the parent having treasury stock?

a. A owns 80% of B and 20% of C; B owns 70% of C.

b. A owns 80% of B, and B owns 20% of A.

c. A owns 80% of B, and B owns 70% of C.

d. None of the above.

16. Plum Inc. acquired 90% of the capital stock of Sterling Co. on 1/1/X1 at a cost of $540,000. On this date Sterling had equipment (10-year life) carried at $200,000 under market and total equity amounting to $350,000.

On 1/1/X1 Sterling acquired 5% (10,000 shares) of Plums outstanding common stock for $3 per share. Internally generated net income was $50,000 for Plum and $40,000 for Sterling.

Consolidated net income for 20X2 is

a. $86,000

b. $90,000

c. $83,500

d. $70,000

17. Company P had 300,000 shares of common stock outstanding. It owned 80% of the outstanding common stock of S. S owned 20,000 shares of P common stock. In the consolidated balance sheet, Company P's outstanding common stock may be shown as

a. 300,000 shares, footnoted to indicate that S holds 20,000 shares.

b. 300,000 shares

c. 300,000 shares, less 20,000 shares of treasury stock.

d. 285,000 shares