Fact Pattern 41-3​ DIY Fasteners Company Decides to Consolidate Its Operations with Evergrip

question 33

Multiple Choice

Fact Pattern 41-3​
DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc., to form Fit-Rite Bolts & Screws Inc.
-Refer to Fact Pattern 41-3. The articles of consolidation differ from Fit-Rite's articles of incorporation. The articles​

• A) ​are replaced by Evergrip's articles of incorporation.
• B) ​are replaced by the articles of consolidation.
• C) ​effectively prevent the consolidation.
• D) ​prevail.

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Definitions:

Loss on Disposal

A financial loss that occurs when an asset is sold for less than its carrying amount on the books.

Gain on Disposal

The profit earned from selling a capital asset for more than its book value.

Straight-line Method

A method of calculating depreciation of an asset, dividing the difference between its cost and salvage value by the total number of years it is expected to be in use.

Salvage Value

The expected financial return on an asset at the time of its disposal after its serviceable life has concluded.