A business combination in which a new corporation is formed to take over the assets and operations of two or more separate business entities, with the previously separate entities being dissolved, is a/an:
Pooling of interests
In a business combination, the direct costs of registering and issuing equity securities are
Added to the parent/investor company’s investment account
Charged against other paid-in capital of the combined entity
Deducted from income in the period of combination
None of the above
An excess of the fair value of net assets acquired in a business combination over the price paid is
Reported as a gain from a bargain purchase
Applied to a reduction of noncash assets before negative goodwill may be reported
Applied to reduce noncurrent assets other than marketable securities to zero before negative goodwill may be reported
Applied to reduce goodwill to zero before negative goodwill may be reported
Cork Corporation acquires Dart Corporation in a business combination. Which of the following would be excluded from the process of assigning fair values to assets and liabilities for purposes of recording the acquisition? (Assume Dart Corporation is dissolved.)
Patents developed by Dart because the costs were expensed under GAAP
Dart’s mortgage payable because it is fully secured by land that has a market value far in excess of the mortgage
An asset or liability amount for over- or underfunding of Dart’s defined-benefit pension plan
None of the above
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