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45. Easton Company and Lofton Company were combined in a
purchase transaction. Easton was able to acquire Lofton at a bargain
price. The sum of the fair values of identifiable assets acquired less
the fair value of liabilities assumed exceeded the cost to Easton.
Proper accounting treatment by Easton is to report the excess amount
as
a. a gain.
b. part of current income in the year of combination.
c. a deferred credit and amortize it.
d. paid-in capital.
46.
Purchased goodwill should
a. be written off as soon as possible against retained earnings.
b. be written off as soon as possible as an extraordinary item.
c. be written off by systematic charges as a regular operating
expense over the period benefited.
d. not be amortized.
47.
The intangible asset goodwill may be
a. capitalized only when purchased.
b. capitalized either when purchased or created internally.
c. capitalized only when created internally.
d. written off directly to retained earnings.