At the beginning of fiscal 2017, Wooster Company acquired a small savings and loan association for $82 million. The book value of the assets of the acquired company were $209 million, its liabilities $138.0 million. An appraiser determined that the acquirees land had a fair value of $2 million in excess of its net book value. Wooster also determined that the acquiree had an unrecorded liability of $5.40 million relating to a lawsuit. The book value of all other assets and liabilities approximated fair value. What did Wooster Company record as goodwill for this acquisition?

Select one:

a. $14.40 million

b. $7.60 million

c. $9.00 million

d. $-0- million

e. None of these are correct

The Carol Chemical Company disclosed a valuation allowance of $1,592 million related to various deferred tax assets on December 31 of the current year. The valuation allowance had a balance of $1,500 million on January 1 of the current year. What effect did this increase in the allowance have on Dow Chemicals net income for the current year?

Select one:

a. Decrease net income by $92 million

b. Increase net income by $92 million

c. Increase net income by $1,500 million

d. Decrease net income by $1,500 million

e. None of these are correct