Larry's Liquor Acquired the Net Assets of Drake's Drinks in Exchange

question 41

Multiple Choice

Larry's Liquor acquired the net assets of Drake's Drinks in exchange for cash.The acquisition price exceeds the fair value of the net assets acquired.How should Larry's Liquor determine the amounts to be reported for the plant and equipment, and for long-term debt of the acquired Drake's Drinks?
$\quad$ Plant and Equipment $\quad$ Long-Term Debt

• A)\(\quad \)Fair value\(\quad \)\(\quad \)\(\quad \)\(\quad \) \(\quad \)Drake's carrying amount
• B)\(\quad \)?Fair value \(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)Fair value
• C)\(\quad \)?Drake's carrying amount\(\quad \) Fair value
• D)\(\quad \)?Drake's carrying amount \(\quad \)Drake's carrying amount

---

Definitions:

Clayton Act

An antitrust law enacted in the United States in 1914, aimed at preventing anti-competitive practices and monopolies.

Sherman Antitrust Act

A foundational piece of U.S. legislation passed in 1890 aimed at preventing anti-competitive practices, monopolies, and fostering fair competition in the marketplace.

Supreme Court

The highest judicial court in a country or state, which typically has the final say in legal disputes.

Antitrust Cases

Legal disputes that arise when businesses are accused of practices that limit competition, aiming to protect consumers and ensure a fair marketplace.