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10. a. How would the following ratios differ for a company that used the purchase method to account for an acquisition versus the pooling-of-interests method
10. a. How would the following ratios differ for a company that used the purchase method to account for an acquisition versus the pooling-of-interests method in the year following the acquisition? Return on sales Return on assets Asset turnover
b. Two years after the acquisition, the company decides that it was a failure and sells the target at a price substantially below its original price but above the original book value. What effect will this transaction have on the earnings of the acquirer in the two cases (purchase versus pooling)?
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