Canto Ltd, a Spanish Corporation, Acquired 100% Interest in Bevo $\begin{array}{ll}\text { Net Assets (Bevo) } & 35,000,000 \\\text { Goodwill } & 15,000,000 \\\text { Cash } &&50,000,000\end{array}$

question 1

Multiple Choice

Canto Ltd, a Spanish corporation, acquired 100% interest in Bevo, Inc., a U.S.corporation for $50,000,000.The net assets of Bevo had a book value of $35,000,000 and a fair value of $46,000,000.How should Canto record the business combination? A.
$\begin{array}{ll}\text { Net Assets (Bevo) } & 35,000,000 \\\text { Goodwill } & 15,000,000 \\\text { Cash } &&50,000,000\end{array}$

B.
$\begin{array}{ll}\text { Net Assets (Bevo) } &46,000,000 \\\text { Goodwill } & 4,000,000 \\\text { Cash } &&50,000,000\end{array}$

C.
$\begin{array}{ll}\text { Net Assets (Bevo) } &50,000,000 \\\text { Cash } &&50,000,000\end{array}$

D.
$\begin{array}{ll}\text { Net Assets (Bevo) } &46,000,000 \\\text { Goodwill } & 4,000,000 \\\text { Cash } &&50,000,000\end{array}$

• A)Entry A
• B)Entry B
• C)Entry C
• D)Entry D

Understand the selection criteria and applications of costing systems in manufacturing processes.

Comprehend the accounting treatment of normal and abnormal spoilage in cost accounting.

Grasp the concept of equivalent units and how they are used in process costing, including differences between weighted average and FIFO methods.

Understand the rationale behind using predetermined overhead rates in costing.

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Definitions:

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The process by which individuals acquire the values, behaviors, and knowledge necessary to function effectively in society.

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a wide-scale approach to understanding systems or phenomena, often involving society or economies as a whole.

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Comprehensive programs or actions designed to address significant issues affecting large populations or communities.

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A large group of individuals who live in the same area, share a common culture, and function under a shared political and economic system.