a.
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
Identify: The type of business combination when an outboard engine manufacturer was taken over by inboard marine engineer manufacturer.
a.

Answer to Problem 1UTI
This is market extension merger because they are increasing the geographical presence of the company.
Explanation of Solution
The U.S federal trade commission defines six types of mergers
They are as follows:
- Backward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a supply of services or product it provides.
- Forward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a company that uses it products.
- Horizontal merger: It is a merger of companies which deals with similar products and company.
- Product extension merger: It is a merger where the acquiring company is expanding its product offering.
- Market extension merger: It is a merger which increases the market area and coverage.
- Conglomerate merger: Merger of firms in unrelated business.
b.
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
Identify: The type of business combination when drug store chain was taken over by cosmetics manufacturer acquires.
b.

Answer to Problem 1UTI
This is conglomerate merger because both are unrelated businesses merging together.
Explanation of Solution
The U.S federal trade commission defines six types of mergers
They are as follows:
- Backward vertical integration: Itis the deal where a company moves down the production marketing cycle by acquiring a supply of services or product it provides.
- Forward vertical integration: Itis the deal where a company moves down the production marketing cycle by acquiring a company that uses it products.
- Horizontal merger: Itis a merger of companies which deals with similar products and company.
- Product extension merger: Itis a merger where the acquiring company is expanding its product offering.
- Market extension merger: Itis a merger which increases the market area and coverage.
- Conglomerate merger: Mergerof firms in unrelated business.
c.
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
Identify: The type of business combination when mail order movie rental company was taken over by financial holding company.
c.

Answer to Problem 1UTI
This is product extension merger because company is expanding its product offerings.
Explanation of Solution
The U.S federal trade commission defines six types of mergers
They are as follows:
- Backward vertical integration: Itis the deal where a company moves down the production marketing cycle by acquiring a supply of services or product it provides.
- Forward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a company that uses it products.
- Horizontal merger: It is a merger of companies which deals with similar products and company.
- Product extension merger: It is a merger where the acquiring company is expanding its product offering.
- Market extension merger: It is a merger which increases the market area and coverage.
- Conglomerate merger: Merger of firms in unrelated business.
d.
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
Identify: The type of business combination when a chip manufacturer was taken over by a computer manufacturer.
d.

Answer to Problem 1UTI
This is backward vertical integration because chips are used for making computers.
Explanation of Solution
The U.S federal trade commission defines six types of mergers
They are as follows:
- Backward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a supply of services or product it provides.
- Forward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a company that uses it products.
- Horizontal merger: It is a merger of companies which deals with similar products and company.
- Product extension merger: It is a merger where the acquiring company is expanding its product offering.
- Market extension merger: It is a merger which increases the market area and coverage.
- Conglomerate merger: Merger of firms in unrelated business.
e.
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
Identify: The type of business combination when broadcasting company was taken over by Walt Disney Company.
e.

Answer to Problem 1UTI
This is forward vertical integration because they are hiring broadcasting company.
Explanation of Solution
The U.S federal trade commission defines six types of mergers
They are as follows:
- Backward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a supply of services or product it provides.
- Forward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a company that uses it products.
- Horizontal merger: It is a merger of companies which deals with similar products and company.
- Product extension merger: It is a merger where the acquiring company is expanding its product offering.
- Market extension merger: It is a merger which increases the market area and coverage.
- Conglomerate merger: Merger of firms in unrelated business.
f.
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
Identify: The type of business combination when Colorado electric utility company was taken over by California based electric utility.
f.

Answer to Problem 1UTI
This is horizontal merger because both offer similar products.
Explanation of Solution
The U.S federal trade commission defines six types of mergers
They are as follows:
- Backward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a supply of services or product it provides.
- Forward vertical integration: It is the deal where a company moves down the production marketing cycle by acquiring a company that uses it products.
- Horizontal merger: It is a merger of companies which deals with similar products and company.
- Product extension merger: It is a merger where the acquiring company is expanding its product offering.
- Market extension merger: It is a merger which increases the market area and coverage.
- Conglomerate merger: Mergerof firms in unrelated business.
Want to see more full solutions like this?
Chapter 1 Solutions
ADVANCED ACCOUNTING
- Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.) Date Placed in Asset Machinery Service October 25 Original Basis $ 120,000 Computer equipment February 3 47,500 Used delivery truck* August 17 Furniture April 22 60,500 212,500 The delivery truck is not a luxury automobile. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. What is the allowable depreciation on Evergreen's property in the current year, assuming Evergreen does not elect §179 expense and elects out of bonus depreciation?arrow_forwardAssume that TDW Corporation (calendar-year-end) has 2024 taxable income of $952,000 for purposes of computing the §179 expense. The company acquired the following assets during 2024: (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,250 263,325 880,425 $ 3,414,000 a. What is the maximum amount of §179 expense TDW may deduct for 2024? Maximum §179 expense deductiblearrow_forwardhelparrow_forward
- Identify and discuss at least 7 problems with the Jamaican tax system and then provide recommendations to alleviate the problems.arrow_forwardOn 17-Feb of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,302,500; $295,000 was allocated to the basis of the land and the remaining $1,007,500 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. d. Assume the building was purchased and placed in service on 17-Feb of year 1 and is residential property. Depreciation Expense Year 1 Year 2 $ 36,632 Year 3 $ 36,632arrow_forwardOn 17-Feb of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,302,500; $295,000 was allocated to the basis of the land and the remaining $1,007,500 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3? Year 1 Depreciation Expense Year 2 Year 3arrow_forward
- On 17-Feb of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,302,500; $295,000 was allocated to the basis of the land and the remaining $1,007,500 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. c. Assume the building was purchased and placed in service on 22-Nov instead of 17-Feb. Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3? Year 1 Year 2 Year 3 Depreciation Deductionarrow_forward1) Evaluate the progress and challenges in achieving a single set of global accounting standards. 2) Discuss the benefits and drawbacks of globalization in accounting, providing relevant examples.arrow_forwardWanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $140,000. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. a. What is Bob's basis in the warehouse and in the land if the appraised value of the warehouse was $100,750 and the appraised value of the land was $115,000? Bob's Basis Warehouse Landarrow_forward
- On 17-Feb of year 1, Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,302,500; $295,000 was allocated to the basis of the land and the remaining $1,007,500 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. e. What would be the depreciation for 2024, 2025, and 2026 if the property were nonresidential property purchased and placed in service 17-Feb, 2007 (assume the same original basis)? Depreciation Year Expense 2024 2025 2026arrow_forwardWhat percentage of RBC’s total assets is held in investments (at October 31, 2020 and 2019)? refer to the 2020 financial statements and accompanying notes of Royal Bank of Canada (RBC). Note that RBC also holds a significant loan portfolio. What is the business reason for holding loans versus securities? Comment on how the investments are classified and presented on the balance sheet. What percentage of total interest income comes from securities (2020 and 2019)? Are there any other lines on the income statement or in OCI) relating to the securities? What percentage of net income (include any relevant OCI items) relates to securities (2020 versus 2019)? Calculate an approximate return on the investments in securities.arrow_forwardYou are the partner-in-charge of a large metropolitan office of a regional public accounting firm. Two members of your professional staff have come to you to discuss problems that may affect the firm's independence. Neither of these situations has been specifically answered by the AICPA Professional Ethics Division. Case 1: Don Moore, a partner in the firm, has recently moved into a condominium that he shares with his girlfriend, Joan Scott. Moore owns the condominium and pays all the expenses relating to its maintenance. Otherwise, the two are self-supporting. Scott is a stockbroker, and recently she has started acquiring shares in one of the audit clients of this office of the public accounting firm. The shares are held in Scott's name. At present, the shares are not material in relation to her net worth. 1. What arguments would indicating that the firm's independence has not been impaired? 2. What arguments would indicating that the firm's independence has been impaired? 3. Which…arrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage