Under the New Entity Method

question 35

Multiple Choice

Under the new entity method,

• A)the net assets of the acquiring company remain at book value while those of the acquired company are recorded at fair value.
• B)the net assets of the acquiring company are recorded at fair value while those of the acquired company are recorded at book value.
• C)the net assets of both companies are recorded at fair market value.
• D)the net assets of both companies are recorded at book value.