For Each of the Following Situations, Select the Best Letter

question 65

Essay

For each of the following situations, select the best letter Answer to reflect the effect of the numbered item on the acquirer's accounting entry at the date of combination when separate incorporation will be maintained. Items (4) and (6) require two selections.
(A) Increase Investment account.
(B) Decrease Investment account.
(C) Increase Liabilities.
(D) Increase Common stock.
(E) Decrease common stock.
(F) Increase Additional paid-in capital.
(G) Decrease Additional paid-in capital.
(H) Increase Retained earnings
(I) Decrease Retained earnings
_____1. Direct costs.
_____2. Indirect costs.
_____3. Stock issue costs.
_____4. Contingent consideration.
_____5. Bargain purchase.
_____6. In-process research and development acquired.

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Definitions:

Algae

A diverse group of photosynthetic organisms, ranging from unicellular microalgae to large multicellular forms, that are typically found in aquatic environments.

Insect Larvae

are the juvenile form of insects following hatching from eggs, before metamorphosing into their adult forms.

Detritus Food Chain

A series of processes by which nutrients are recycled in an ecosystem, starting from organic waste and decomposing organisms to detritivores and then to their predators.

Decaying Matter

Organic material that is breaking down through the process of decomposition by microorganisms.