CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts for the transaction using the purchase method. Record Corps balance sheet at the date of acquisition appears below:

Record, Corp. Balance Sheet Acquisition Date Assets Cash	Historical Cost	Current Market Value
	$ 479,000	$479,000
Accounts Receivable	225,400	210,000
Inventory	98,900	105,000
Depreciable Assets less Accumulated Depreciation	554,700	600,000
Note Receivable Goodwill	100,000	100,000
Total Assets	$1,458,000
Liabilities and Equities Accounts Payable	$ 458,000	$458,000
Note Payable	325,000	325,000
Deferred Income Tax Liability	125,000	125,000
Shareholders' Equity	550,000
Total Liabilities and Equities	$1,458,000

Based on the information concerning Record Corp. what amount of goodwill should CD record at the acquisition date? (Points : 2) ($294,000) $614,000 $1,200,000 $350,000

Question 5. 5. Playtime Corporation Assume that Playtime Corp. has agreed to construct a new playground for SurreyCounty for $2,450,000. Construction of the new playground will begin on March 17, 2012 and is expected to be completed in August 2013. At the signing of the contract Playtime Corp. estimates that the it will cost $1,750,000 to build the playground. At the end of 2012 Funtime provided the following information about the project: Costs incurred Estimated costs Year to date remaining 2012 $1,200,000 $600,000 If Playtime uses the percentage of completion to recognize revenue on the long-term contract how much gross margin should Playtime recognize in 2012? (Points : 2)

$389,200 $278,000 $556,000 $433,550