Chips Co. made an investment in Micro Inc., paying $1000 on August 13, 2020 for 5% of Micro's stock, so the Fair Value method is used. During December 2020, Micro declared a dividend of $100. On December 31, 2020 (Chips' fiscal year end), the market value of Chips' in investment in Micro is worth $1,200. Chips Co's financial statements at December 31, 2020 would include...

• A.

  The book value of the investment in Micro would be $1,195, and the income statement would include a $200 Unrealized Holding Gain.

• B.

  The book value of the investment in Micro would be $1,205, and the income statement would include a $200 Unrealized Holding Gain.

• C.

  The book value of the investment in Micro would be $1,200, the income statement would include a $200 Unrealized Holding Gain, and the income statement would include Dividend Revenue of $5.

• D.

  There would be no change in the book value of the investment, and the income statement would include $5 in Dividend Revenue.

• E.

  None of the other answers are correct.

Verba Company paid $1000 to acquire Nouna Company. At the date of the acquisition, at the acquisition date, Nouna's assets had book value $1200 and fair value $1500, and both the book value and fair value of Nouna's liabilities was $800. How much Goodwill should Verba recognize associated with the acquisition of Nouna?

• A. $600
• B. None of the other answers are correct.
• C. -500
• D. -$200
• E. $30