Entity A and Entity B combined their businesses. The acquirer in the business combination is not clearly identifiable. Which of the following is not an indicator that Entity A is the acquirer? A. Entity A is the initiator of the business combination. B. Entity A’s former owners receive the largest portion of the voting rights in the combined entity. C. Entity A’s former management team dominates the management of the combined entity. D. Entity C, a new entity, is formed and Entity C transfers cash to Entity A and Entity B

Entity A and Entity B combined their businesses. The acquirer in the business combination is not clearly identifiable. Which of the following is not an indicator that Entity A is the acquirer? A. Entity A is the initiator of the business combination. B. Entity A’s former owners receive the largest portion of the voting rights in the combined entity. C. Entity A’s former management team dominates the management of the combined entity. D. Entity C, a new entity, is formed and Entity C transfers cash to Entity A and Entity B

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 5P

See similar textbooks

Similar questions

In a business combination, the acquiree is the business that: Select one: a. Finances the business combination. b. Pays the acquisition consideration. c. The acquirer obtains control of in a business combination. d. Obtains control of the acquiree.
Assuming the existence of two companies, A and B, which of the following is not a business combination? Company C is formed to acquire all the assets and liabilities of Company A and Company B. Both Company A and Company B liquidate. Company A acquires all assets and liabilities of Company B, and Company B liquidates. Company A acquires all assets and liabilities of Company B. Company B continues as a company, holding shares of Company A. Company A acquires a group of assets of Company B, the group of assets not constituting a business. Company B continues to operate as a company.
Assuming the existence of two companies, A and B, which of the following is not a business combination? a. Company A acquires all assets and liabilities of Company B. Company B continues as a company, holding shares of Company A. b. Company C is formed to acquire all the assets and liabilities of Company A and Company B. Both Company A and Company B liquidate. c. Company A acquires all assets and liabilities of Company B, and Company B liquidates. d. Company A acquires a group of assets of Company B, the group of assets not constituting a business. Company B continues to operate as a company.
What 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.
A parent-subsidiary relationship is formed when: A. The acquirer firm is dissolved. B. The acquired firm is not dissolved. C. Both acquirer and acquired firms are dissolved. D. The acquired firm is dissolved.
Which of the following is not true with regard to a business combination accomplished in the form of a stock acquisition? a. Two companies remain in existence after the combination b. A parent-subsidiary relationship is said to exist c. Consolidated financial statements are normally required d. All of the above statements are true
Choose the correct. In a father-son-grandson business combination, which of the following is true?a. The father company always must have its total accrual-based income computed first.b. The computation of a company’s accrual-based net income has no effect on the accrual-based net income of other companies within a business combination.c. A father-son-grandson configuration does not require consolidation unless one company owns shares in all of the other companies.d. All companies solely in subsidiary positions must have their accrual based net income computed first within the consolidation process.
Choose the correct. What is a basic premise of the acquisition method regarding accounting for noncontrolling interest?a. Consolidated financial statements should be primarily for the benefit of the parent company’s stockholders.b. Consolidated financial statements should be produced only if both the parent and the subsidiary are in the same basic industry.c. A subsidiary is an indivisible part of a business combination and should be included in its entirety regardless of the degree of ownership.d. Consolidated financial statements should not report a noncontrolling interest balance because these outside owners do not hold stock in the parent company.
In a father-son-grandson business combination, which of the following is true?a. The father company always must have its total accrual-based income computed first.b. The computation of a company’s accrual-based net income has no effect on the accrual-based net income of other companies within a business combination.c. A father-son-grandson configuration does not require consolidation unless one company owns shares in all of the other companies.d. All companies solely in subsidiary positions must have their accrual-based net income computed first within the consolidation process.
Which type of business organisation has a separated legal entity from its owners, and the owners are not liable for the debt of the business? Select one: A. Limited company B. Company C. Partnership D. Sole proprietorship
What is a basic premise of the acquisition method regarding accounting for a noncontrolling interest?a. Consolidated financial statements should be primarily for the benefit of the parent company’s stockholders.b. Consolidated financial statements should be produced only if both the parent and the subsidiary are in the same basic industry.c. A subsidiary is an indivisible part of a business combination and should be included in its entirety regardless of the degree of ownership.d. Consolidated financial statements should not report a noncontrolling interest balance because these outside owners do not hold stock in the parent company.
Which of the following is NOT true with regard to the statutory consolidation form of business combination? a. The combining entities both cease to exist after the combination. b. A new corporation must be formed. c. Control of the net assets of the combining entities must be acquired by the new entity. d. The net assets of the combining entities must be acquired with assets of the new corporation.