Midnight Corporation Transferred Part of Its Assets to Noon Corporation

question 13

Multiple Choice

Midnight Corporation transferred part of its assets to Noon Corporation in exchange for all of Noon's stock. Midnight distributed all of Noon's stock pro rate to Midnight's shareholders. What is this type of reorganization?

• A) spin- off
• B) split- off
• C) dividend distribution
• D) split- up

---

Definitions:

Owner's Equity

The residual interest in the assets of a business after deducting its liabilities.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including loans, accounts payable, and mortgages.

Property Plant and Equipment

These are long-term tangible assets owned by a business, used in producing goods or services and not expected to be consumed or converted into cash within a year.

Accumulated Depreciation

The total amount of an asset's cost that has been expensed over its useful life, reflecting wear and tear or obsolescence.