S1: A stock acquisition occurs when one corporation pays cash, issue stock, or issues debt for all or part of the voting stock and of another company; and the acquired company dissolves and ceases to exist as a separate legal entity. S2: In an asset acquisition, the books of the acquired company are closed out and its assets and liabilities are transferred to the books of the acquirer. A. Both statements are correct. B. Only S2 is correct. C. Only S1 is correct. D. Both statements are incorrect.
S1: A stock acquisition occurs when one corporation pays cash, issue stock, or issues debt for all or part of the voting stock and of another company; and the acquired company dissolves and ceases to exist as a separate legal entity. S2: In an asset acquisition, the books of the acquired company are closed out and its assets and liabilities are transferred to the books of the acquirer. A. Both statements are correct. B. Only S2 is correct. C. Only S1 is correct. D. Both statements are incorrect.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 1C
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S1: A stock acquisition occurs when one corporation pays cash, issue stock, or
issues debt for all or part of the voting stock and of another company; and the acquired company dissolves and ceases to exist as a separate legal entity. S2: In an asset acquisition, the books of the acquired company are closed out and its assets and liabilities are transferred to the books of the acquirer.
A. Both statements are correct.
B. Only S2 is correct.
C. Only S1 is correct.
D. Both statements are incorrect.
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