Companies a and B Combine to Form Company X and Cease

question 32

Multiple Choice

Companies A and B combine to form Company X and cease to exist as separate entities. This is an example of ____.

• A)a merger
• B)an acquisition by Company A
• C)a consolidation
• D)an acquisition by Company B

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Definitions:

Straight-Line Depreciation

A method for calculating the annual depreciation expense by equally distributing the cost of an asset minus its salvage value over its estimated useful life.

Group Method

A depreciation approach applied to a collection of assets that have similar service lives and uses, treating them as a single asset for depreciation purposes.

Capitalized Trucks

The value of trucks owned by a company that is treated as an asset on the balance sheet and depreciated over time.