For Each of the Following Situations,select the Best Answer Concerning

question 26

Essay

For each of the following situations,select the best answer concerning accounting for combinations:
(A)Pooling-of-interests method only.
(B)Purchase method only.
(C)Acquisition method only.
(D)Pooling-of-interests method and purchase method,but not acquisition method.
(E)Purchase method and acquisition method,but not pooling-of-interests method.
(F)Pooling-of-interests method and acquisition method,but not purchase method.
(G)All methods (pooling-of-interests,purchase,and acquisition. )
(H)None of the methods (neither pooling-of-interests,purchase,nor acquisition. )
_____1.Direct costs are expensed.
_____2.Indirect costs are expensed.
_____3.Direct costs reduce the additional paid-in capital of the acquirer.
_____4.Both direct costs and indirect costs increase the investment account.
_____5.Direct costs increase the investment account,and stock issue costs reduce the acquirer's additional paid-in capital account.
_____6.Contingent consideration increases the investment account at date of acquisition.
_____7.Contingent consideration increases the investment account at a date subsequent to the acquisition date.
_____ 8.A bargain purchase reduces the fair value of long-term assets.
_____9.A bargain purchase is ignored or not applicable.
_____10.A bargain purchase is recorded at date of acquisition as a gain (not extraordinary).
_____11.The combination clearly defines an acquired company and an acquiring company.
_____12.Method(s)appropriate to combinations prior to June 30,2001.

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Definitions:

Strawberry Muffin

A type of baked good that incorporates strawberries into the muffin batter, known for its sweet flavor and moist texture.

Household Spending

The total expenditure by household consumers on goods and services, excluding savings and loan repayments.

Past Ten Years

The time period stretching back from the current date to a decade ago.

Services

Intangible products that cannot be stored, touched, or seen and are consumed at the point of delivery, such as healthcare, education, and financial advising.