Question Completion Status: QUESTION 1 6 points Save Answe Using the acquisition method for a business combination, goodwill is generally defined as: A. Cost of the investment less the subsidiary's fair value at acquisition date. B. Cost of the investment less the subsidiary's book value at the acquisition date. C. Cost of the investment less the subsidiary's book value at the beginning of the year. D. Cost of the investment less the subsidiary's fair value at the beginning of the year. E. Cost of the investment less the subsidiary's fair value at the end of the year. QUESTION 2 6 points Save Answer FASB ASC 805 "Business Combinations" provides principles for allocating the fair value of an acquired business. When the collective fair values of the separately identified assets acquired and liabilities assumed exceed the fair value of the consideration transferred, the difference should be: A. Treated as negative goodwill to be amortized over the period benefitted B. Treated as goodwill and tested for impairment on an annual basis C. Applied pro rata to reduce, but not below zero, the amounts initially assigned to specific noncurrent assets of the acquired company D. Recognized as an ordinary gain from a bargain purchase 6 points Save Answer QUESTION 3 On January 1, 2013, Pacer Company paid $2,020,000 for 60,000 shares of Lennon Co.'s voting common stock which represents a 35% investment. No allocation to goodwill or other specific account was made. Significant influence over Lennon was achieved by this acquisition. Lennon distributed a dividend of $3.00 per share during 2013 and reported net income of $820,000. What was the balance in the investment in Lennon Co. account found in the financial records of Pacer as of December 31, 2013? A. $2,207,000. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Close Window Save and Submit F7 F5 F4 6 BO esc deles # a & 7 $ 4 9 % 5 8 6