Which of the following statements best describes the difference between a merger and joint venture? a. None of these statements provided differences the two. b. In a merger , two firms combine financial resoures to establish a new firm c. in a joint venture the bidding firm takes control o fthe control of the joint project. d. In a joint venture , firms agree to cooperate in pursuit of joint goal

Which of the following statements best describes the difference between a merger and joint venture? a. None of these statements provided differences the two. b. In a merger , two firms combine financial resoures to establish a new firm c. in a joint venture the bidding firm takes control o fthe control of the joint project. d. In a joint venture , firms agree to cooperate in pursuit of joint goal

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 27GI

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Multiple Choice Questions Which of the following statements is correct? All joint arrangements which are not structured through a separate vehicle are classified as joint ventures. For a joint venture, the rights pertain to the rights and obligations associated with individual assets and liabilities, whereas with a joint operation, the rights and obligations pertain to the net assets. Where the joint operators have designed the joint arrangement so that its activities primarily aim to provide the parties with an output it will be classified as a joint venture. In considering the legal form of the separate vehicle if the legal form establishes rights to individual assets and obligations, the arrangement is a joint operation. If the legal form establishes rights to the net assets of the arrangement, then the arrangement is a joint venture. A 50:50 joint operation was commenced between two participants. Mary Company contributed cash of $90 000, and Strickland Company contributed…
Which one of the following statements correctly applies to a merger? Multiple Choice The acquiring firm does not have to seek approval for the merger from its shareholders. The shareholders of the target firm must approve the merger. The acquiring firm will acquire the assets but not the debt of the target firm. The merged firm will have a new company name. The titles to individual assets of the target firm must be transferred into the acquiring firm's name.
Which of the following statements about joint arrangements is/are incorrect: (i) Whenever a joint arrangement is structured through a vehicle that is separate from the parties, the arrangement is classified as a joint venture (ii) Whenever the contractual arrangements give the parties rights to the assets and obligations for the liabilities of the arrangement, the arrangement is classified as a joint operation (iii) Joint operations are reported in the consolidated statement of financial position of the joint operator by recognising the share of assets and liabilities attributable to the joint operator (iv) Joint ventures are reported in the consolidated statement of financial position of the joint venturer using the equity method of accounting a. (i) only b. (ii) only c. (iii) only d. (iv) only e. (i) and (ii)
The combination of resources through a partnership arrangement rather than through a legal combination of the acquiring and target firm is known as a ? a Leveraged Buyout b Joint Venture c Hostile Takeover d Vertical Merger e None of the above
In financial statements that are not separate financial statements, how should a joint venturer account for its interest in a joint arrangement? a. As an investment measured either at cost, fair value or using equity method b. As an investment measured using the equity method c. By using a T-account d. By recognizing its share in the assets, liabilities, income and expenses of the join venture and adding them line by line to similar accounts
A joint arrangement in which the assets and liabilities relating to the arrangement are held in a separate vehicle can be: a. Either joint venture or joint operation b. Joint venture c. Neither joint venture nor joint operation d. Joint operation
In a joint venture, the partners donot act in common or act as an agent to one another . What does this mean . Give examples.
Is this set up possible? A and B entered into a partnership AB and Assoc, C and D entered into a partnership CD and Assoc, AB, CD and F corporation entered into a joint venture, how would you account for that?
What information will be of interest to the partners of a joint venture at the closing of the undertaking? Select one: a. Amount do the partners receive in total, i.e. from compensation for services rendered, as well as from their profit share from the venture. b. Profits were realised by the venture prior to any compensation to the partners for their contributions c. The ultimate amount to be distributed according to the profit-sharing ratio. d. All of the given options are correct.
Explain elaborately the reasons for the failure of joint venture.
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 identity
A firm may choose to enter a new market through a joint venture. All of the following features of a joint venture reduce the risk associated with market entry EXCEPT: A. The partner firm will understand the local business environment. B. The local partner has an existing reputation in the country. C. Ability to easily integrate with the partner company culture. D. The cost of entry is shared by the joint venture partner firm.