Research by Scholes and Wolfson on M&As before 1981, between 1981 and 1986, and after 1986 found: a. No differences in M&A activity over the 1981–1986 period compared the pre-1981 b. Intensified level of merger activity to tax motives that were put in place with the 1981 Act and eliminated by the 1986 Act c. No clear trends in data d. None of the above

Research by Scholes and Wolfson on M&As before 1981, between 1981 and 1986, and after 1986 found: a. No differences in M&A activity over the 1981–1986 period compared the pre-1981 b. Intensified level of merger activity to tax motives that were put in place with the 1981 Act and eliminated by the 1986 Act c. No clear trends in data d. None of the above

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 12DQ

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Key questions to consider when determining the appropriate consolidation adjustment entries include the following except for: a. What has been recorded by the legal entities? b. What is the tax effect of the adjustments made? c . Does the transaction involve the parent entity selling assets to the subsidiary, or the subsidiary selling assets to the parent entity? d. Is this a prior period or a current period transaction?
In considering its proposed statement of financial accounting standards on business combinations, the FASB received numerous comment letters. Many of these letters addressed the FASB's proposed adoption of the economic unit concept as a valuation basis for less-than-100-percent acquisitions. A sampling of these letters includes the following observations: Bob Laux, Microsoft: Microsoft agrees with the Board that the principles underlying standards should strive to reflect the underlying economics of transactions and events. However, we do not believe the Board's conclusion that recognizing the entire economic value of the acquiree, regardless of the ownership interest in the acquiree at the acquisition date, reflects the underlying economics. Patricia A. Little, Ford Motor Company: We agree that recognizing 100 percent of the fair value of the acquiree is appropriate. We believe that this is crucial in erasing anomalies which were created when only the incremental ownership…
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How does a merger allow a firm to circumvent tax laws? a By offering the firm a chance to use the losses in one company to offset profits and tax liabilities of another. b The merger would allow the company to grow their revenue stream into a lower percentage tax bracket. c Tax breaks are offered to newly merged firms d Application of the Clayton Act of 1914 e Application of the Sherman Antitrust Act
Consider the following worksheet with information extracted from a financial statement:2018 Assets Liabilities EquityReported (P) 500 000 100 000 400 000An analyst makes an adjustment that decreases goodwill by P100 000 and equity (profit) by P100 000. This goodwill was acquired on consolidation, hence there are no tax adjustments. Using the worksheet approach, what would be the change in the debt to assets ratio?
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