Fun with Florals Corporation Acquired All the Voting Common Stock

question 106

Multiple Choice

Fun with Florals Corporation acquired all the voting common stock shares of Crafts-to-Go Corporation under the acquisition method.Crafts-to-Go remains a separate corporation.Which of the following statements about the financial statements is true?

• A)The assets and liabilities of Crafts-to-Go Corporation would be not revalued and disclosed at fair value on the date of acquisition.
• B)Fun with Florals will use the equity method of accounting for this investment.
• C)Fun with Florals will prepare consolidated financial statements.
• D)Fun with Florals will use the fair value method of accounting for this investment.

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Definitions:

Individual Accounts

Separate financial accounts maintained for different customers, employees, or entities to track transactions distinctly.

Common Characteristic

refers to a shared attribute, quality, or feature among items, individuals, or concepts within a particular group or category.

Subsidiary Ledger

A detailed ledger that contains all the transaction details of a specific general ledger account, aiding in maintaining accurate financial records.

Customer Account Activity

A record of all financial transactions that have occurred on a customer's account within a given period.