Assume that on January 1, 2010, P Company acquired all the outstanding stock (10,000 shares) of S Company for cash of $160,000. What journal entry would P Company make to record the shares of S Company acquired?

	a.	Debit CS 160,000 / Credit Cash 160,000
	b.	Debit Net Assets 160,000 / Credit Cash 160,000
	c.	Debit Investment160,000 / Credit Cash 160,000
	d.	None of the above

The main evidence of control for purposes of consolidated financial statements involves

	a.	possessing majority ownership
	b.	having decision-making ability that is not shared with others.
	c.	having the parent company and the subsidiary participating in the same industry.
	d.	being the sole shareholder

P Company acquires all of the voting stock of S Company for $930,000 cash. The book values of S Companys assets are $800,000, but the fair values are $840,000 because land has a fair value above its book value. Goodwill from the combination is computed as:

	a.	$130,000.
	b.	$90,000.
	c.	$0.
	d.	$40,000.