FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Which of the following is not an application of the acquisition method?
a. Measuring the non-controlling interest at the non-controlling interest’s proportionate share in the acquiree’s net identifiable assets or fair value, whichever is higher.
b. Measuring the consideration transferred at fair value.
c. Identifying the acquirer which is the entity that obtains control over another business in a business combination.
d. Determining the acquisition date which is the date the acquirer obtains control over acquiree.
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- The unamortized excess account is a. the excess purchase cost that is attributable to goodwill. b. the excess purchase cost that is attributable to a bargain purchase. c. the excess purchase cost over the subsidiary’s net assets’ book value d. the excess purchase cost over the subsidiary’s net assets’ fair value.arrow_forwardWhat is one of the primary objectives of accounting for business amalgamations? A) To recognize the fair value of the acquired assets and liabilities. B) To minimize tax liabilities for the acquiring company. C) To maintain separate accounting records for the acquiring and acquired entities. D) To increase shareholder dividends in the acquiring company.arrow_forwardCompanies are required to value non-controlling interests on the acquisition date. Wat approaches might a company take to value non-controlling interest?arrow_forward
- The consolidated balance of fixed assets will be affected by working paper entries involving all of the following, except: A. Excess of fixed asset FV over BV of the parent at the date of acquisition B. Amortization of the excess of fixed asset FV over BV of the subsidiary at the date of acquisition C. Realized gain or loss on intercompany sale of fixed asset D. Unrealized gain or loss on intercompany sale of fixed assetarrow_forwardHow are acquisition costs recorded in a merger?arrow_forwardThe sale and distribution of the assets of a business on its termination is Group of answer choices a takeover. a breach of fiduciary duty. liquidation. dissolution.arrow_forward
- What important issues should management consider prior to a merger or acquisition? What are the current GAAP requirements for the type of merger/acquisition?arrow_forward16.Explain the process of accounting for mergers and acquisitions. How are the assets and liabilities of the acquired company recorded on the balance sheet of the acquiring company? Discuss the treatment of goodwill and any adjustments that might be necessary post-acquisition. Provide an example of a hypothetical merger and the journal entries that would be recorded.arrow_forward
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