On April 1, 2015, Paxton Corporation Acquired All of the Outstanding

question 90

Multiple Choice

On April 1, 2015, Paxton Corporation acquired all of the outstanding voting common stock of Stanley Company and Stanley will remain a separate corporation. Stanley's year-end is December 31. How should the assets and liabilities of Stanley be reported on the consolidated financial statements when Stanley is combined with Paxton on April 1, 2015?

• A) At book values at the April 1, 2015 date of acquisition.
• B) At fair values at the April 1, 2015 date of the acquisition.
• C)At book values at December 31, 2014.
• D)At fair values at December 31, 2014 less accumulated depreciation calculated on the difference between book and fair values since that date.

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Definitions:

Vital Capacity

The maximum amount of air a person can expel from the lungs after a maximum inhalation, a measure of lung function.

Abbreviation

The act or result of reducing a word or phrase to shorter form intended to represent the full form.

Abbreviation

A shortened form of a word or phrase, used to simplify communication.

CXR

An abbreviation for Chest X-Ray, a diagnostic tool used to examine the lungs and heart.