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Mergers can be financed with either cash or common stock of the acquiring firm. Three key factors for consideration when deciding whether to use cash or common stock are control, taxes, and the sharing of gains. Discuss each of these factors and how they affect the cash versus stock decision.
Physical Form
Physical form refers to the tangible appearance or structure of an item, indicating its material composition and physical characteristics.
Long-term
Pertains to assets, liabilities, investments, or obligations that are expected to be resolved or realized beyond one year.
Income Summary
The income summary account is used in the closing process of accounting to summarize revenue and expenses for a specific period, helping determine the net income or loss.
Permanent Account
An account that is not closed at the end of the accounting period and whose balances are carried forward to the next period, such as assets, liabilities, and equity accounts.
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