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Question;12. Which;of the following situations best describes a business combination to be;accounted for as a statutory merger?;A. Both companies in a combination continue to operate as separate, but;related, legal entities.;B. Only one of the combining companies survives and the other loses its;separate identity.;C. Two companies combine to form a new third company, and the original two;companies are dissolved.;D. One company transfers assets to another company it has created.;13. A;statutory consolidation is a type of business combination in which;A. one of the combining companies survives and the other loses its;separate identity.;B. one company acquires the voting shares of the other company and the two;companies continue to operate as separate legal entities.;C. two publicly traded companies agree to share a board of directors.;D. each of the combining companies is dissolved and the net assets of both;companies are transferred to a newly created corporation.;Rivendell;Corporation and Foster Company merged as of January 1, 20X9. To effect the;merger, Rivendell paid finder's fees of $40,000, legal fees of $13,000, audit;fees related to the stock issuance of $10,000, stock registration fees of;$5,000, and stock listing application fees of $4,000.;14. Based;on the preceding information, under the acquisition method, what amount;relating to the business combination would be expensed?;A. $72,000;B. $19,000;C. $53,000;D. $63,000;15. Based;on the preceding information, under the acquisition method;A. $72,000 of stock issue costs are treated as goodwill.;B. $19,000 of stock issue costs are treated as a reduction in the issue;price.;C. $19,000 of stock issue costs are expensed.;D. $72,000 of stock issue costs are expensed.;16. Using;the preceding information, what amount would have been expensed if the purchase;method of accounting was used?;A. $0;B. $19,000;C. $53,000;D. $72,000;17. Using;the preceding information, what amount would have been expensed if the pooling-of-interests;method of accounting was used?;A. $0;B. $19,000;C. $53,000;D. $72,000;18. Burrough;Corporation paid $80,000 to acquire all of Helyar Company's net assets. Helyar;reported assets with a book value of $60,000 and fair value of $98,000 and liabilities;with a book value and fair value of $23,000 on the date of combination.;Burrough also paid $3,000 to a search firm for finder's fees related to the;acquisition. What amount will be recorded as goodwill by Burrough Corporation;while recording its investment in Helyar?;A. $0;B. $5,000;C. $8,000;D. $13,000;Plummet;Corporation reported the book value of its net assets at $400,000 when Zenith;Corporation acquired 100 percent ownership. The fair value of Plummet's net;assets was determined to be $510,000 on that date.;19. Based;on the preceding information, what amount of goodwill will be reported in;consolidated financial statements presented immediately following the;combination if Zenith paid $550,000 for the acquisition?;A. $0;B. $50,000;C. $150,000;D. $40,000;20. Based;on the preceding information, what amount will be recorded by Zenith as its;investment in Plummet, if it paid $500,000 for the acquisition?;A. $610,000;B. $400,000;C. $500,000;D. $510,000;21. Based;on the preceding information, what amount of goodwill will be reported in;consolidated financial statements presented immediately following the;combination if Zenith paid $500,000 for the acquisition?;A. $0;B. $50,000;C. $150,000;D. $40,000

 

Paper#44514 | Written in 18-Jul-2015

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