A horizontal merger takes place between companies operating: a. At different stages of the production process b. In the same area of business c. In unrelated lines of business d. All of the above e. None of the above
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A horizontal merger takes place between companies operating:
a. At different stages of the production process
b. In the same area of business
c. In unrelated lines of business
d. All of the above
e. None of the above
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Solved in 2 steps
- Intra-entity transfers between the component companies of a business combination are quite common. Why do these intra-entity transactions occur so frequently?Which of the following is a vertical combination? a. A combination where the two entities are competitor in the same industry b. A combination where the two entities have a potential buyer/seller relationship c. A combination where the two entities are unrelated d. None of the above describes a vertical combinationA conglomerate merger takes place between firms in completely different industries.; True or False
- An expansion consists of: - taking over another business - merging with another business - both.Many companies transfer inventories from one subsidiary to another. Often the companies have integrated operations in which one subsidiary provides raw materials, another manufacture finished products, and another distributes and perhaps another sells the product at retail. Required: Discuss how intercompany transfers should be treated for consolidation purposes, in both the statement of financial position and the statement of comprehensive income.Consolidation financial statements are prepared when a parent-subsidiary relationship exists in recognition of the accounting principle concept of: a. Reliability b. Entity c. Materiality d. Going Concern
- Which most accurately describes what happens to consolidation worksheet entries, assuming there is no push down accounting Worksheet entries are posted only to the ledgers of the subsidiary as post closing entries Worksheet entries are posted to the ledgers of the company owning the noncontrolling interest Worksheet entries are posted to the ledgers of both the parent and subsidiary as post closing entries Worksheet entries are posted only to the ledgers of the parent as post closing entries Worksheet entries are not posted to either the books of the parent or the subsidiarySegment Reporting To provide information that can be used to evaluate _____ and ______ across different lines of business and in different parts of the world, Multinational Corporations (MNCs) disaggregate consolidated totals and provide disclosures on a segment basis. This information may also be used to assess how __________ an MNC is. Fill in the spaces?Scenario Many companies transfer inventories from one subsidiary to another. Often the companies have integrated operations in which one subsidiary provides raw materials, another manufacture finished products, and another distributes and perhaps another sells the product at retail. Required: Discuss how intercompany transfers should be treated for consolidation purposes, in both the statement of financial position and the statement of comprehensive income.
- It is often difficult to draw a distinctive line between mergers and takeovers, and the terms tend to be used rather loosely to describe the process by which firms combine. In principle, a merger may be defined as a combination of firms of approximately equal standings on the basis of an agreement between their respective managements who recognize some mutual advantage in he arrangement. A merger can result in a new company being formed or one of the two companies absorbs the other. Required: i. Describe various types of mergers and critically discuss the motives for undertaking mergers and takeover. ii. Identify the organ(s) or institution(s) that regulates/approves the mergers and acquisitions in Tanzania and discuss all steps/procedures to be undertaken by the merging companies in Tanzania as required by the regulator for a merger to be successful. iii. Identify any recent Merger and Acquisition in Tanzania, discuss its type and the motive behind it.Which of the following situations best describes a business combination to be accounted for as a statutory merger? Select one: a. Two companies combine to form a new third company, and the original two companies are dissolved. b. One company transfers assets to another company it has created c. Both companies in a combination continue to operate as separate, but related, legal entities. d. Only one of the combining companies survives and the other loses its separate identityA merger occurs when one corporation takes over all the operations of another business entity, and that entity is dissolved. Select one: True False
