Business combination: A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations. Consolidated financial statements: Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information. To prepare : Thejournal entries in the books of Company B as of January 1, 2016.

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Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

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Answer 2

Question

Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

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Answer 3

Question

Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

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Answer 4

Question

Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

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Answer 5

Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

Answer 6

Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

Answer 7

Chapter 7, Problem 7.5P

To determine

Business combination:

A business combination refers tothe combining of one or more business organizations in a single entity. Business combinations lead to the formation of combined financial statements. After business combination, the entities having separate control merge into one having control over all the assets and liabilities. Merging and acquisition are two types of business combinations.

Consolidated financial statements:

Consolidated financial statements refer to the combined financial statements of entities which are prepared at year-end. Prepared when one organization is either acquired by the other entity or two organizations merged to form a new entity, consolidated financial statements serve the purpose of both the entities about financial information.

To prepare: Thejournal entries in the books of Company B as of January 1, 2016.

Answer 8

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Answer 11

Ch. 7 - Prob. 1UTI Ch. 7 - Prob. 2UTI Ch. 7 - Prob. 3UTI Ch. 7 - Prob. 4UTI Ch. 7 - Exercise 1 (LO 1) Purchase of shares directly from...Ch. 7 - Prob. 2E Ch. 7 - Prob. 3E Ch. 7 - Prob. 4E Ch. 7 - Prob. 5E Ch. 7 - Prob. 6E

Solution Summary: The author explains how business combinations lead to the formation of combined financial statements. Merging and acquisition are two types of business combination.

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