QUESTION 15 In an acquisition, the company whose assets are acquired: a. will go out of...
QUESTION 15
In an acquisition, the company whose assets are acquired:
| a. |
will go out of existence. |
|
| b. |
will become a subsidiary of the acquiring company. |
|
| c. |
will be dissolved along with the acquiring company to form a new corporation. |
|
| d. |
None of the above are correct. |
QUESTION 16
-
The founders of an acquired company are granted a contingent payment for three years after the acquisition based on those years earnings:
a. The acquirer typically recognizes the payment as goodwill when the contingency is resolved and payment is given.
b. The acquirer typically recognizes the payment as goodwill when the contingency is resolved.
c. The acquirer typicall includes the expected payments based on future earnings as goodwill at acquisition.
d. The acquirer typically amortizes contingencies over the applicable award period.
Homework Answers
15)
When an acquisition is made, the assets of the both companies are used for the purpose of carrying out of operations of the buying company. Acquisitions are usually made to increase production capacities.
Hence, correct option is d. None of the above are correct.
Add Answer to:
QUESTION 15
In an acquisition, the company whose assets are acquired:
a.
will go out of...
1.Under the acquisition method, when are most identifiable assets acquired, liabilities assumed, and non-controlling interests in...
1.Under the acquisition method, when are most identifiable assets acquired, liabilities assumed, and non-controlling interests in the acquiree recognized? Select one: a. When an acquirer is identified b. Acquisition date c. Date of verbal agreement d. 90 days after acquisition date 2.Which of the following is not an example of a transaction cost? Select one: a. Finder's fee b. Investigatory costs c. Depreciation costs d. Facilitatory costs 3.Which of the following is not a step for acquiring a subsidiary? Select...
12. When a private company acquires another company, GMP for private companies allows which identifiable intangible...
12. When a private company acquires another company, GMP for private companies allows which identifiable intangible assets to be combined with goodwill and not separately capitalized! Brand names b. Technology Software licenses d. Noncompetition agreements d. . Textbook page number that supports your answer: 13. Company A has unreported identifiable intangible assets that are very valuable, and would like investors to know about them. Which one of the following actions will allow these intangible assets to be reported? a. Get...
TRUE/FALSE 1. When control is obtained through a stock acquisition, combined financial statements automatically result for...
TRUE/FALSE 1. When control is obtained through a stock acquisition, combined financial statements automatically result for future periods. 2. Tax loss carryovers are generally transferable in a business combination and may be recorded as an asset. 3. In all business combinations, one company gains control over the assets and liabilities of another company. 4. Regardless of the purchase price, the current assets, liabilities, and long-term investments (not including equity method investments) are recorded at fair market value in a business...
Advanced Accounting Chapter 3 Question
Branson paid $573,200 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1, 2020. On that date, the subsidiary had a book value of $430,000 (common stock of $200,000 and retained earnings of $230,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $133,000 fair value. Any remaining excess fair value was considered goodwill. In negotiating the acquisition price, Branson also promised to pay Wolfpack’s former owners an additional $44,000 if Wolfpack’s income exceeded...
Aye Ltd acquired 90% interest in Bee Ltd on 1 January 20x1, for which the purchase...
Aye Ltd acquired 90% interest in Bee Ltd on 1 January 20x1, for which the purchase consideration was structured as follows: · Cash of $800,000. · A parcel of freehold land with carrying amount of $300,000 in the books of Aye Ltd but had a fair value of $400,000 as at 1 January 20x1. · A contingent payment of $100,000 payable in two years from the acquisition- date if Bee Ltd meets specific profit targets. On 1 January 20x1, based...
Exercise 2-5 Pritano Company acquired all the net assets of Succo Company on December 31, 2013,...
Exercise 2-5 Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,362,200 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 891,390 $891,390 Plant and equipment 1,075,210 1,477,700 Total $1,966,600 $2,369,090 Liabilities $178,520 $232,990 Common stock 483,630 Other contributed capital 544,200 Retained earnings 760,250 Total $1,966,600 As part of the negotiations, Pritano agreed to pay the stockholders of Succo $379,850 cash if the...
Consolidation several years subsequent to date of acquisition—Equity method Assume that a parent company acquired a...
Consolidation several years subsequent to date of acquisition—Equity method Assume that a parent company acquired a subsidiary on January 1, 2014. The purchase price was $715,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Original Amount Original Useful Life Property, plant and equipment (PPE), net $140,000 16 years Patent 245,000 7 years License 105,000 10 years Goodwill 225,000 Indefinite $715,000 The [A]...
Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. F...
Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. Fair Value of noncontrolling interest at the outstanding is $65,400. Smith is to continue its corporate existence as a subsidiary of Pan Company. Smith's stockholders' equity Jan 1, 2018, was as follows Common Stock-$20,000 Additional Paid in Capital- $30,000 Retained Earnings- $30,000 Total Stockholders' Equity- $80,000 At the time of the acquisition, all of Smith's assets and liabilities were reported...
Record the acquisition of Seguros Company. Record the legal fees related to the combination. Record the...
Record the acquisition of Seguros Company.
Record the legal fees related to the combination.
Record the payment of stock issuance costs.
On December 31, Pacifica, Inc., acquired 100 percent of the voting stock of Seguros Company Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transferred to the owner of Seguros included 51,695 newly issued Pacifica common shares ($20 market value, $5 par values and an agreement to pay an additional...
Consolidation several years subsequent to date of acquisition—Equity method Assume a parent company acquired a subsidiary...
Consolidation several years subsequent to date of acquisition—Equity method Assume a parent company acquired a subsidiary on January 1, 2017. The purchase price was $820,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Original Amount Original Useful Life Property, plant and equipment (PPE), net $240,000 12 years Patent 240,000 8 years License 160,000 10 years Goodwill 180,000 Indefinite $820,000 The [A] assets...
12. When a private company acquires another company, GMP for private companies allows which identifiable intangible assets to be combined with goodwill and not separately capitalized! Brand names b. Technology Software licenses d. Noncompetition agreements d. . Textbook page number that supports your answer: 13. Company A has unreported identifiable intangible assets that are very valuable, and would like investors to know about them. Which one of the following actions will allow these intangible assets to be reported? a. Get...
TRUE/FALSE 1. When control is obtained through a stock acquisition, combined financial statements automatically result for future periods. 2. Tax loss carryovers are generally transferable in a business combination and may be recorded as an asset. 3. In all business combinations, one company gains control over the assets and liabilities of another company. 4. Regardless of the purchase price, the current assets, liabilities, and long-term investments (not including equity method investments) are recorded at fair market value in a business...
Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. Fair Value of noncontrolling interest at the outstanding is $65,400. Smith is to continue its corporate existence as a subsidiary of Pan Company. Smith's stockholders' equity Jan 1, 2018, was as follows Common Stock-$20,000 Additional Paid in Capital- $30,000 Retained Earnings- $30,000 Total Stockholders' Equity- $80,000 At the time of the acquisition, all of Smith's assets and liabilities were reported...
Record the acquisition of Seguros Company.
Record the legal fees related to the combination.
Record the payment of stock issuance costs.
On December 31, Pacifica, Inc., acquired 100 percent of the voting stock of Seguros Company Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transferred to the owner of Seguros included 51,695 newly issued Pacifica common shares ($20 market value, $5 par values and an agreement to pay an additional...
Most questions answered within 3 hours.
-
the slime layer external to the prokaryotic cell wall is called
the ?
asked 6 minutes ago -
Cheyenne Company must decide whether to make or buy some of its
components. The costs of...
asked 9 minutes ago -
What is the maximum number of edges that a graph on 7 vertices can
have if...
asked 7 minutes ago -
What is the entropy change for mixing 1 liter of a monoatomic
ideal gas (call it...
asked 7 minutes ago -
A company that has 150 employees chooses a committee of 11 to
represent employee retirement issues....
asked 28 minutes ago -
the
force between two 2.11 x 10^-4 C charges that are 2.11 meters apart
is ______N?
asked 43 minutes ago -
A truck of mass m slows from speed v0 to speed v in a
time t....
asked 29 minutes ago -
A 60kg box rests on a floor with a coefficient of kinetic
friction of 0.600 and...
asked 27 minutes ago -
if you cut off ANS innervation what would happen to the heart
rate?
asked 26 minutes ago -
What is the output of the below code?
var color = "yellow";
var colorObject = {...
asked 27 minutes ago -
Suppose you purchased 19 shares of Disney stock for $23.95 per
share on May 1, 2012....
asked 31 minutes ago -
Using the sample PV system below, calculate the wire sizes
needed for various portions of the...
asked 45 minutes ago