21 Which of the following would best describe a stock acquisition? Group of answer choices ABC Company + DEF Company = ABC Company and a Subsidiary ABC Company + DEF Company = XYZ Company ABC Company + DEF Company = ABC Company None of the choices
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- Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it When a company buys the stock of another company, the accounting treatment depends on the number of outstanding shares acquired. If a company acquires 35% of the shares (as a percentage of the outstanding shares) of another company, the accounting method the acquirer uses is: - consolidation method - fair value method - equity method - Any of the above. The materiality principle allows the company to choose the method.If the ownership of a closely held company is less than 50% of the outstanding stock, then the ownership is termed a: Question 20 options: a) minority interest. b) marketable asset. c) block asset. d) blockage discount. e) majority interest.Which of the following correctly indicates how the issue price of common stock shares would be valued when a corporation makes a follow-on issue? Market forces determine the selling price, as it is marketed by the selling group The highest expected issue price per share that can be obtained while still selling of all of the shares is selected The highest expected issue price per share that can be obtained, regardless of the selling group's ability to market the shares, is selected The market price of existing shares is used as guidance
- 1. The cost method of accounting for stock investments is used when the company acquires a. Greater than 50% of the company's stock b. Between 20% to 50% of the company's stock c. Less than 20% of the company's stock 2. The significance of percentage of ownership relates to how much _____________ the acquiring company has in the new company. a. data b. control c. confidenceWhich of the following statement about a rights issue is correct? a. The share price can be expected to increase on the ex-rights date b. On the ex-rights date the rights separate from the share c. The subscription price is usually greater than the market price d. A rights issue is offered to an investor whether they are an existing shareholder or not e. If you buy shares cum-rights you are not entitled to participate in the rights issue5. Assuming that on July 1, 2020, Kangaroo Company purchased its own share atP10.00. How much is the book value per share for the year 2020?6. Assuming that there is a cumulative and participating preference share, how thiswill affect the book value per share computation? Explain briefly. PROVIDE A SOLUTION AND NO PLAGIARISM THANK YOU!
- What amount should be recognized as gain on reversal of share appreciation rights in 2021?*see attached a. 1,600,000b. 1,200,000c. 400,000d. 018. Which of the following differs in GAAP and IFRS? Calculation of EPS Model for recognizing stock-based compensation Accounting for convertible debt Modification of a share optionConsider the following table of Earnings Components: Firm A Firm B Firm C Reported EPS $ 12 $ 15 $ 18 Analyst’s EPS composition: Permanent component (βP = 5) 80 % 60 % 75 % Transitory component (βT = 1) 10 % 35 % 25 % Value-irrelevant component (β0 = 0) 10 % 5 % 0 % The implied share price of Firm C’s stock is: Multiple Choice $18.00 $63.00 $72.00
- Which statement is true regarding the accounting treatment for convertible preferred shares under IFRS? Question 21 options: a) Convertible preferred shares are initially measured at the fair value of the cash or other asset received. b) At conversion, a gain or loss is recognized on the difference between the carrying value of the equity portion of the shares and the fair value. c) Convertible preferred shares are subsequently measured at fair value. d) The liability and equity elements of convertible preferred shares must be presented separately on the statement of financial position.2. The following are the common sources of share premium, except Group of answer choices a. Excess over par or stated value b. Donated capital c. Revaluation surplus d. Issuance of share warrants9. Multiple Choices The corporation has the option to repurchase the preferred stock at a specified price. a. redeemable b. cumulative c. convertible d. compound e. callable f. treasury