Please answer all the questions correctly, they are allrelated so it’s not a multple questions. Thumbs up for the completecorrect answers
1. Pizza purchased 100% of the net assets of Submarine Companyin an “Asset Acquisition.” Pizza paid $5 million for SubmarineCompany. Submarine Company had identifiable net assets of $3.5million.
The difference of $1.5 million will be accounting for as:
A. Ordinary Gain
B. Bargain Purchase
C. Goodwill
D. Other Assets
2. The following is the list of assets and liabilities ofSubmarine Company
Book Value Fair Value
AccountReceivable 1,400,000 1,350,000
Inventory 500,000 600,000
Plant and Equipment 750,000 1,900,000
AccountsPayable 100,000 150,000
Mortgage Payable 200,000 200,000
2,350,000 3,500,000
Complete the journal entry torecord the asset acquisition
Debit Credit
3 If Pizza Co. had instead purchased Submarine through a “StockAcquisition” (purchased 100% of Submarine Stock) the journal entryto record the stock acquisition would be as follows:
StockAcquisition Debit Credit
Investmentsubsidiary 5,000,000
Cash 5,000,000
A.True
B. False
4. (Stock Acquisition) The current method of accounting for astock acquisition is more aligned with Parent Company Conceptversus the Economic Unit Concept.
A. True
B. False
5. (Stock Acquisition) Noncontrolling interest represents theequity position of the subsidiary shareholders who continue to holdstock (did not sell their ownership) in the subsidiary.
A. True
B. False
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
