A Company Purchases the Net Assets of B Company,which Consists $\begin{array} { l l } \text { DR Investment in B } & \$ 2,000,000 \\\text { CR Issued Capital } & \$ 2,000,000\end{array}$

question 26

Multiple Choice

A Company purchases the net assets of B Company,which consists of land $2 100 000 and a liability of $100 000,paying by issuing 2 000 000 x $1,which is the fair value of the shares in A Company.A Company will record the acquisition as follows:

• A) \(\begin{array} { l l }
• \text { DR Investment in B } & \$ 2,000,000 \\
• \text { CR Issued Capital } & \$ 2,000,000
• \end{array}\)
• B) \(\begin{array} { l l }
• \text { DR Land } & \$ 2,100,000 \\
• \text { CR Liability } & \$ 100,000 \\
• \text { CR Cash } & \$ 2,000,000
• \end{array}\)
• C) \(\begin{array} { l l }
• \text { DR Land } & \$ 2,100,000 \\
• \text { CR Liability } & \$ 100,000 \\
• \text { CR Issued Capital } & \$ 2,000.000
• \end{array}\)
• D) none of the above

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Definitions:

Aggregate Planner

A methodology used in manufacturing to determine optimal production levels, inventory levels, and workforce levels, considering various factors over a medium-term horizon.

Inventory

The total amount of goods or materials held in stock by a business or organization.

Backlog Costs

Expenses associated with delays in filling orders or meeting service obligations, often due to insufficient inventory or production capacity.

Level Strategy

A business approach that maintains steady production rates and workforce levels, even in the face of demand fluctuations, aiming for operational stability.