Test Bank Advanced Accounting 9e byFischerChapter 1 — Business Combinations: America’s Most PopularBusiness Activity, Bringing an End to the ControversyMULTIPLE CHOICE1. Ana.b.c.d.economic advantage of a business combination includesUtilizing duplicative assets.Creating separate management teams.Coordinated marketing campaigns.Horizontally combining levels within the marketing chain.ANS:CDIF: EOBJ: 12. A tax advantage of business combination can occur when the existingowner of a company sells out and receives:a. cash to defer the taxable gain as a “tax-free reorganization.”b. stock to defer the taxable gain as a “tax-free reorganization.”c. cash to create a taxable gain.d. stock to create a taxable gain.ANS:BDIF: EOBJ: 13. A controlling interest in a company implies that the parent companya. owns all of the subsidiary’s stock.b. has influence over a majority of the subsidiary’s assets.c. has paid cash for a majority of the subsidiary’s stock.d. has transferred common stock for a majority of the subsidiary’soutstanding bonds and debentures.ANS:BDIF: MOBJ: 24. Which of the following is a potential abuse that may arise when abusiness combination is accounted for as a pooling of interests?a. Assets of the buyer may be overvalued when the price paid by theinvestor is allocated among specific assets.b. Earnings of the pooled entity may be increased because of thecombination only and not as a result of efficient operations. … Purchase document to see full attachment

Open chat
Hello Good Friend
40% OFF on your Assignments.
How can we help you today?

Order your essay today and save 20% with the discount code TWENTYTWENTY50