Sya Ltd Acquired All the Assets and Liabilities of Littman Ltd

question 40

Multiple Choice

Sya Ltd. acquired all the assets and liabilities of Littman Ltd. by issuing common shares to Littman. After this transaction, Littman owned 30% of Sya's outstanding shares. How should Sya record Littman's assets and liabilities on its books?

• A)At their original cost
• B)At their net book value
• C)At their fair market value
• D)At their fair market value plus an allocated share of goodwill to each item

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Definitions:

Startup Cost

Initial expenses incurred during the process of creating a new business, including but not limited to legal fees, marketing, and inventory costs.

Capital Structure

The composition of a company's liabilities and equity, including debt and equity financing, used to finance the company's operations and growth.

Debt and Equity

The composition of a company's capital, consisting of debt (loans and bonds) and equity (stocks), used for financing its operations.

New Project

A project that involves starting a new task, product, service, or process, which has not been undertaken by the organization before.