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not subject to amortization but subject to impairment. D. Expenses im 3. Two methods of arranging business combinations: A/ Merger and consolidation B. Consolidation and Acquisition of stocks C. Acquisition and uniting of interest D. Merger and acquisition of stocks

not subject to amortization but subject to impairment. D. Expenses im 3. Two methods of arranging business combinations: A/ Merger and consolidation B. Consolidation and Acquisition of stocks C. Acquisition and uniting of interest D. Merger and acquisition of stocks

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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odwill to be amortized periodically for 20 years. G. Goodwill to be amortized for 40 years D. Expenses immediately. B. Goodwill not subject to amortization but subject to impairment. 3. Two methods of arranging business combinations: C. Acquisition and uniting of interest D. Merger and acquisition of stocks A/ Merger and consolidation B. Consolidation and Acquisition of stocks . The cost of registering equity securities in a business combination should be recorded as: A. An income of the period B. An expense of the period C. Deduction from additional paid-in capital D. Part of the cost of the stock acquired 5. In acquisition-type combination, the appropriate accounting for the excess of fair values of net assets acquired er the price paid is to: A. Recognize as income in the books of the acquirer B. Recognize as additional paid-in capital in the books of the acquirer blbe C. Reduce proportionately current fair values assigned to the acquiree's non-current assets any remaining excess as a deferred credit. D. Reduce proportionately current fair values assigned to the acquiree's non-current assets other investments in marketable securities and recognize any remaining excess as a deferred credit, 01 6. Which of the following is included as part of the consideration given? A. Direct and indirect acquisition costs attributable to the acquisition. C. Contingent consideration B. Indirect cost and contingent consideration D. All expenses and liabilities relating to the acquisition 7. Which of the following is not included in the price paid in an acquisition type business combination? C. Investment banker's finder's fee for the combination .000.0.1y A. Cash paid B. Fair value of shares issued D. Contingent consideration 8. Under the acquisition method the retained earnings of the acquirer after the combination is equal to: A. The sum of the retained earnings of the acquiree and the acquirer B. The retained earnings of the acquirer plus any income from acquisition C. The retained earnings of the acquirer only. D. The retained earnings of the acquirer less any amortization of goodwill. 9.Which of the following is not true of a business combination classified as acquisition? A. The acquirér continues tó exist ás á sepárátė légal entity B. The acquiree ceases to exist as a separate legal entity C. Both companies continue their legal existence D. One company acquires the assets and liabilities of one or more other companies in exchange for stock, cash or other consideration. 10. Shares issued as consideration in an acquisition are recorded at: A. Their fair value as at the date when the acquirer obtains control over the net assets and operations of the acquiree. B. At cost. C. At cost or fair value whichever is lower D. At cost or fair value whichever is higher 21 P age-Accounting for Business Combination
Transcribed Image Text:odwill to be amortized periodically for 20 years. G. Goodwill to be amortized for 40 years D. Expenses immediately. B. Goodwill not subject to amortization but subject to impairment. 3. Two methods of arranging business combinations: C. Acquisition and uniting of interest D. Merger and acquisition of stocks A/ Merger and consolidation B. Consolidation and Acquisition of stocks . The cost of registering equity securities in a business combination should be recorded as: A. An income of the period B. An expense of the period C. Deduction from additional paid-in capital D. Part of the cost of the stock acquired 5. In acquisition-type combination, the appropriate accounting for the excess of fair values of net assets acquired er the price paid is to: A. Recognize as income in the books of the acquirer B. Recognize as additional paid-in capital in the books of the acquirer blbe C. Reduce proportionately current fair values assigned to the acquiree's non-current assets any remaining excess as a deferred credit. D. Reduce proportionately current fair values assigned to the acquiree's non-current assets other investments in marketable securities and recognize any remaining excess as a deferred credit, 01 6. Which of the following is included as part of the consideration given? A. Direct and indirect acquisition costs attributable to the acquisition. C. Contingent consideration B. Indirect cost and contingent consideration D. All expenses and liabilities relating to the acquisition 7. Which of the following is not included in the price paid in an acquisition type business combination? C. Investment banker's finder's fee for the combination .000.0.1y A. Cash paid B. Fair value of shares issued D. Contingent consideration 8. Under the acquisition method the retained earnings of the acquirer after the combination is equal to: A. The sum of the retained earnings of the acquiree and the acquirer B. The retained earnings of the acquirer plus any income from acquisition C. The retained earnings of the acquirer only. D. The retained earnings of the acquirer less any amortization of goodwill. 9.Which of the following is not true of a business combination classified as acquisition? A. The acquirér continues tó exist ás á sepárátė légal entity B. The acquiree ceases to exist as a separate legal entity C. Both companies continue their legal existence D. One company acquires the assets and liabilities of one or more other companies in exchange for stock, cash or other consideration. 10. Shares issued as consideration in an acquisition are recorded at: A. Their fair value as at the date when the acquirer obtains control over the net assets and operations of the acquiree. B. At cost. C. At cost or fair value whichever is lower D. At cost or fair value whichever is higher 21 P age-Accounting for Business Combination
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