S1: Under the acquisition method, if the fair values of identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be accounted for goodwill. S2: With an acquisition, direct and indirect expenses are considered a par of the total cost of the acquired company. A. Only S1 is correct. B. Both statements are correct. C. Both statements are incorrect. D. Only S2 is correct.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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S1: Under the acquisition method, if the fair values of identifiable net assets
exceed the value implied by the purchase price of the acquired company, the
excess should be accounted for goodwill. S2: With an acquisition, direct and
indirect expenses are considered a par of the total cost of the acquired
company.

A. Only S1 is correct.
B. Both statements are correct.
C. Both statements are incorrect.
D. Only S2 is correct.

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