The Following Data Pertains to Questions

question 26

Multiple Choice

The following data pertains to questions
Parent and Sub Inc had the following balance sheets on December 31,2008: On January 1,2009 Parent purchased all of Sub Inc's Common Shares for $40,000 in cash.On that date,Sub's Current Assets and Fixed Assets were worth $26,000 and $54,000,respectively.Assuming that Consolidated Financial Statements were prepared on that date,answer the following:
-IAS 27 outlines the requirements for identifying the company that is the acquirer in a business combination when it's not clear who that is.Which is not a consideration in determining which company is the acquirer??

• A)If the means of payment is cash,which party is paying the cash.
• B)Relative holdings of voting shares in the combined entity.
• C)Voting rights of the respective parties after the combination of their businesses.
• D)Any by-laws or provisions of the incorporation acts of each company that details the manner in which a business combination will occur at law .

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Definitions:

Merchandise Sold

The total goods or inventory that have been sold to customers within a specific period, generating revenue for the business.

Inadvertently Overstated

When financial figures are unintentionally reported higher than their actual values.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the owner's claim on the business assets.