Meredith Company and Kyle Company Were Combined in an Acquisition

question 5

Multiple Choice

Meredith Company and Kyle Company were combined in an acquisition transaction.Meredith was able to acquire Kyle at a bargain price.The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Meredith.After revaluing noncurrent assets to zero there was still some of the bargain purchase amount remaining formerly termed negative goodwill) .Proper accounting treatment by Meredith is to report the amount as

• A)An extraordinary item
• B)Part of current income in the year of combination
• C)A deferred credit and amortize it
• D)Paid-in capital

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Definitions:

Adoptive Parents

Individuals who become the legal guardians of a child through the legal process of adoption, assuming the parental rights and responsibilities.

Biological Parents

The parents to whom a child is born, in contrast with adoptive parents or guardians.

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The total amount of cholesterol in the serum portion of the blood, indicating health status related to cardiovascular risk.

Cardiovascular Disease

A class of diseases that involve the heart or blood vessels, such as coronary artery disease, heart failure, and stroke.