In a transaction accounted for using the acquisition method where consideration transferred exceeds book value of the acquired company, which statement is true for the acquiring company with regard to its investment?

a) Net assets of the acquired company are revalued to their fair values and any excess of consideration transferred over fair value of net assets acquired is allocated to goodwill

b) Net assets of the acquired company are maintained at book value and any excess of consideration transferred over book value of net assets acquired is allocated to goodwill.

c) Acquired assets are revalued to their fair values. Acquired liabilities are maintained at book value. Excess is allocated to goodwill.

Speedy auto repairs uses a job-order costing system. the company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. the company applies all of its overhead costs to jobs based on direct labor-hours. at the beginning of the year, it made the following estimates: direct labor-hours required to support estimated output 20,000 fixed overhead cost $ 350,000 variable overhead cost per direct labor-hour $ 1.00 required: 1. compute the predetermined overhead rate. 2. during the year, mr. wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. the following information was available with respect to his job: direct materials $ 590 direct labor cost $ 109 direct labor-hours used 6