Meredith Company and Kyle Company were combined in an acquisition transaction.Meredith was able to acquire Kyle at a bargain price.The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Meredith.After revaluing noncurrent assets to zero there was still some of the bargain purchase amount remaining formerly termed negative goodwill).Proper accounting treatment by Meredith is to report the amount as
A)An extraordinary item
B)Part of current income in the year of combination
C)A deferred credit and amortize it
D)Paid-in capital

Question

Quizplus · Accepted Answer

The remaining bargain purchase amount should be recognized as a gain in the income statement in the year of the acquisition.

Meredith Company and Kyle Company Were Combined in an Acquisition