Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the fair values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. Proper accounting treatment by Easton is to report the excess amount as
a. a gain.
b. part of current income in the year of combination.
c. a deferred credit and amortize it.
d. paid-in capital.
Answer: a. a gain.
Business
You might also like to view...
What is the written instrument called in which the contract of insurance is set forth?
A. The covenant of insurance. B. The document of record including all warrantees granted. C. The policy. D. The California Insurance Code.
Business
Which of the following are all subjective pronouns?
A) he, she, whom, it, your B) her, him, us, they C) he, she, we, them D) who, she, myself, mine E) he, she, who, it, they
Business