Business, 18.09.2019 05:20 nallwly

Dosmann, inc., bought all outstanding shares of lizzi corporation on january 1, 2016, for $790,000 in cash. this portion of the consideration transferred results in a fair-value allocation of $48,900 to equipment and goodwill of $106,800. at the acquisition date, dosmann also agrees to pay lizzi’s previous owners an additional $205,000 on january 1, 2018, if lizzi earns a 10 percent return on the fair value of its assets in 2016 and 2017. lizzi’s profits exceed this threshold in both years. which of the following is true?
a. the additional$110,000 payment is a reduction in consolidated retained earnings.
b. the fair value of the expected contingent payment increases goodwill at the acquisition date.
c. consolidated goodwill as of janauray 1, 2015, increases by $110,000.
d. the $110,000 is recroded as an expense in 2015.

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Dosmann, inc., bought all outstanding shares of lizzi corporation on january 1, 2016, for $790,000 i...

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