Fasb asc 805, business combinations, provides principles for allocating the fair value of an acquired business. when the collective fair values of the separately identified assets acquired and liabilities assumed exceed the fair value of the consideration transferred, the difference should be:
a. applied pro rata to reduce, but not below zero, the amounts initially assigned to specific noncurrent assets of the acquired firm.
b. treated as negative goodwill to be amortized over the period benefited, not to exceed 40 years.
c. treated as goodwill and tested for impairment on an annual basis.
d. recognized as an ordinary gain from a bargain purchase.

Analyzing operational changes operating results for department b of delta company during 2016 are as follows: sales $540,000 cost of goods sold 378,000 gross profit 162,000 direct expenses 120,000 common expenses 66,000 total expenses 186,000 net loss $(24,000) suppose that department b could increase physical volume of product sold by 10% if it spent an additional $18,000 on advertising while leaving selling prices unchanged. what effect would this have on the department's net income or net loss? (ignore income tax in your calculations.) use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers. sales $answer cost of goods sold answer gross profit answer direct expenses answer common expenses answer total expenses answer net income (loss) $answer