1.Diverse accounting practices resulting from cultural, political, and regulatory differences across different countries result in

a.A lack of comparability among financial statements which are consolidated

b.Greater consistency in the application of accounting principles when preparing consolidated statements

c.A decreased need for accountants with expertise in foreign accounting principles and consolidations

d.Fewer accounting records

2.In 2005 Sprint Corp. acquired Nextel Communications at a cost of $35 billion. The combination of the two U.S. based companies resulted in the third largest telecommunications company. While Nextel had a strong reputation for its services to businesses, Sprint was unfortunately known for poor customer service. The two companies had very different management styles, Nextel was entrepreneurial and Sprint was bureaucratic. Which of the following statements is most likely true?

a.The merger failed because it is inadvisable to combine two very large organizations that have different styles

b.The merger failed because of language differences, differences in accounting standards, and differences in culture

c.Mergers between organizations in the same country only have to contend with financial and economic factors, not differences in corporate culture

d.Mergers involving domestic organizations have some of the same considerations as mergers involving foreign organizations

3.On January 1, 2013, Pinnacle Company purchased all of the common stock of Soyo Company by issuing 30,000 shares of its $10 par value common stock, with a market value of $16/share. Pinnacle Company incurred $25,000 in registration and issuing costs, paid in cash. The book value of Soyo Company at the date of acquisition was $480,000. The amount of the acquisition is

a.$480,000. The fair value of the stock issued.

b.$300,000. The par value of the stock issued.

c.$505,000. The fair value of the stock issued plus the cost of issuing of the shares.

d.$455,000. The fair value of the stock issued less the cost of issuing of the shares.

e.$480,000. The amount that Pinnacle pays is always the book value of the acquired company.