136. The balance sheet of Subsidiary Co. shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. Parent Co. paid Subsidiary $95,000 to acquire it. Parent should record goodwill on this purchase of:

A) $23,600. B) $20,000. C) $3,600. D) $5,000.

137. In accounting the word 'capitalize' means
     1. treat as an asset B) treat as capital

C) take the chance to gain advantage from. D) provide a company with capital.

138. The declaration and issuance of a stock dividend:
     1. Does not change total assets, liabilities, or total stockholders' equity.
     2. Decreases assets and decreases total stockholders' equity.
     3. Does not change retained earnings or paid-in capital.
     4. Decreases total stockholders' equity and increases common stock.

139. ABC paid $2,000 interest on short-term notes payable, $10,000 interest on long-term bonds, and

$6,000 in dividends on its common stock. ABC would report cash outflows from activities, as follows:

1. Operating, $12,000; Financing $6,000. B) Operating, $0; Financing $18,000.

C) Operating, $18,000; Financing $0. D) Operating, $2,000; Financing $16,000.

140. It is possible to calculate shrinkage
     1. in Perpetual Inventory Accounting but not in Periodic Inventory Accounting
     2. in neither Periodic Inventory Accounting nor Perpetual Inventory Accounting
     3. in Periodic Inventory Accounting but not in Perpetual Inventory Accounting
     4. in both Periodic Inventory Accounting and in Perpetual Inventory Accounting