1. Which of the following is not a reason for a business combination to take place? a. Cost savings through elimination of duplicate facilities. b. Quick entry for new and existing products into domestic and foreign markets. c. Diversification of business risk. d. Vertical integration e. Cost increases throughout the organizations 2. A company is not required to consolidate a subsidiary in which it holds more than 50% of the voting stock when a. The subsidiary is located in a foreign country. b. The subsidiary in question is a finance subsidiary. c. The company holds more than 50% but less than 60% of the subsidiarys voting stock. d. The company holds less than 75% of the subsidiarys voting stock e. The subsidiary is in bankruptcy. 3. Which of the following statements is true regarding as statutory merger? a. The original companies dissolve while remaining as separate divisions of a newly created company. b. Both companies remain in existence as legal corporations with one corporation now a subsidiary of the acquiring company. c. The acquired company dissolves as a separate corporation and becomes a division of the acquiring company. d. The acquiring company acquires the stock of the acquired company as an investment. 4. Lisa Co. paid cash for all of the voting common stock of Victoria Corp. Victoria will continue to exist as a separate corporation. Entries for the consolidation of Lisa and Victoria would be recorded in a. A worksheet b. Lisas general journal c. Victorias general journal d. Victorias secret consolidation journal e. The general journals of both companies