Statement 1: A stock acquisition occurs when one corporation pays cash, issue stock, or issues debt for all or part of the voting stock and of another company; and the acquired company dissolves and ceases to exist as a separate legal entity. Statement 2: In an asset acquisition, the books of the acquired company are closed out and its assets and liabilities are transferred to the books of the acquirer. Statement 3: Unrealized profits from transactions between a home office and its branch are added from Beginning inventory and deducted from ending inventory of the branch in preparing combined financial statements for the enterprise. Statement 4: The balance of the Allowance for Overvaluation of Inventories: Branch ledger account is added from the balance of the Investment in Branch account in the separate balance sheet of the home office. Statement 5: Only agency sales and operating expenses determines the sales agency’s profitability. Statement 6: The primary advantages of the system described is that it is simple to establish and maintain. Statement 7: In an acquisition where the acquirer pays cash for the acquiree assets, the book value of the acquirer. Statement 8: In acquisition of assets for assets, the ownership structure of the acquiree does not change Which statements are true?
Statement 1: A stock acquisition occurs when one corporation pays cash, issue stock, or issues debt for all or part of the voting stock and of another company; and the acquired company dissolves and ceases to exist as a separate legal entity.
Statement 2: In an asset acquisition, the books of the acquired company are closed out and its assets and liabilities are transferred to the books of the acquirer.
Statement 3: Unrealized profits from transactions between a home office and its branch are added from Beginning inventory and deducted from ending inventory of the branch in preparing combined financial statements for the enterprise.
Statement 4: The balance of the Allowance for Overvaluation of Inventories: Branch ledger account is added from the balance of the Investment in Branch account in the separate
Statement 5: Only agency sales and operating expenses determines the sales agency’s profitability.
Statement 6: The primary advantages of the system described is that it is simple to establish and maintain.
Statement 7: In an acquisition where the acquirer pays cash for the acquiree assets, the book value of the acquirer.
Statement 8: In acquisition of assets for assets, the ownership structure of the acquiree does not change
Which statements are true?
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