On December 31, 20X1, Oak Corporation Acquired 100 Percent Ownership

Multiple Choice

On December 31, 20X1, Oak Corporation acquired 100 percent ownership of Cherry Corporation. On that date, Cherry reported assets and liabilities with books values of $450,000 and $200,000, respectively, common stock outstanding of $150,000, and retained earnings of $100,000. The book values and fair values of Cherry's assets and liabilities were identical except for land which had increased in value by $15,000 and inventories which had decreased by $5,000.
-Company X acquires 100 percent of the voting shares of Company Y for $275,000 on December 31,20X8.The fair value of the net assets of Company X at the date of acquisition was $300,000.This is an example of a(n) :

A) positive differential.
B) bargain purchase.
C) extraordinary loss.
D) revaluation adjustment.