For Each of the Following Situations, Select the Best Letter

question 72

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.

---

Definitions:

United Nations

An international organization formed in 1945 to promote peace, security, and cooperation among the world's nations.

Food and Agriculture Organization

An agency of the United Nations that leads international efforts to defeat hunger and improve nutrition and food security.

Sensitive Ecosystems

Natural environments that are highly responsive to environmental changes or disturbances, often requiring special protection due to their fragility and ecological significance.

Fishery Collapse

The decline of a fishery to a point where it can no longer sustain a viable fishing activity, often due to overfishing, pollution, or habitat destruction.