BMX Corp Wants to Acquire All the Assets of Cycle Racing

question 69

Essay

BMX Corp. wants to acquire all the assets of Cycle Racing Corp. BMX plans to pay for the assets by issuing its own corporate stock. BMX's board of directors has already approved the merger. In what circumstances would the approval of BMX's shareholders be required for this merger? Is the approval of Cycle Racing's shareholders necessary? Explain.​

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Definitions:

Debits

Entries made on the left-hand side of an accounting ledger, typically indicating increases in assets or expenses or decreases in liabilities, equity, and income.

Credits

Entries in accounting that represent the transfer of value and can decrease assets or increase liabilities and equity.

Account Balance

The amount of money in a financial repository at any given time, which can be a positive or negative value.

Chart of Accounts

An organized list of all the financial accounts in a company's accounting system.