Mergers and Acquisitions Paper 5


Kennedy Company is acquiring Ross Company in an acquisition. What date should be used as the acquisition date for the transaction?


Lebow Corp. acquired control of Wilson Corp. by purchasing stock in steps. Which of the following regarding this type of acquisition is true?


In accounting for a business combination, which of the following intangibles should not be recognized as an asset apart from goodwill?


With respect to the allocation of the cost of a business acquisition, ASC Topic 805 (SFAS 141[R]) requires


On November 30, year 1, Parlor, Inc. purchased for cash at $15 per share all 250,000 shares of the outstanding common stock of Shaw Co. At November 30, year 1, Shaw’s balance sheet showed a carrying amount of net assets of $3,000,000. At that date, the fair value of Shaw’s property, plant and equipment exceeded its carrying amount by $400,000. In its November 30, year 1 consolidated balance sheet, what amount should Parlor report as goodwill?


On April 1, year 1, Parson Corp. purchased 80% of the outstanding stock of Sloan Corp. for $700,000 cash. Parson determined that the fair value of the net identifiable assets was $800,000 on the date of acquisition. The fair value of Sloan’s stock at date of acquisition was $18 per share. Sloan had a total of 50,000 shares of stock issued and outstanding prior to the acquisition. What is the amount of goodwill that should be recorded by Parson at date of acquisition?


A subsidiary, acquired for cash in a business combination, owned inventories with a market value greater than the book value as of the date of combination. A consolidated balance sheet prepared immediately after the acquisition would include this difference as part of


Company J acquired all of the outstanding common stock of Company K in exchange for cash. The acquisition price exceeds the fair value of net assets acquired. How should Company J determine the amounts to be reported for the plant and equipment and long-term debt acquired from Company K? Plant and equipment Long-term debt


In a business combination accounted for as an acquisition the appraised values of the identifiable assets acquired exceeded the acquisition price. How should the excess appraised value be reported?


Shep Co. has a receivable from its parent, Pep Co. Should this receivable be separately reported in Shep’s balance sheet and in Pep’s consolidated balance sheet?
Shep’s balance sheet
Pep’s consolidated balance sheet


Total Questions:
Correct Answers:
Wrong Answers: