Meredith Company and Kyle Company Were Combined in an Acquisition

question 25

Multiple Choice

Meredith Company and Kyle Company were combined in an acquisition transaction. Meredith was able to acquire Kyle at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Meredith. After revaluing noncurrent assets to zero there was still some of the bargain purchase amount remaining (formerly termed negative goodwill) . Proper accounting treatment by Meredith is to report the amount as

• A) A discontinued operations item
• B) Part of current income in the year of combination
• C) A deferred credit and amortize it
• D) Paid-in capital

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Definitions:

Gadgets

Small, innovative, or convenient mechanical or electronic devices, typically designed to perform a particular task or function.

Value

The importance, worth, or usefulness of something, often considered in terms of its utility, monetary worth, or significance to an individual or society.

Enculturation

The process by which individuals learn and adopt the values, customs, and norms of their culture.

Cultural Valuation

The process of assessing the value of a cultural artifact, practice, or idea within a specific societal context.