Corporation A and Corporation B combine in 2019 in pooling of interest business combination. Which of the
Question:
- Corporation A and Corporation B combine in 2019 in pooling of interest business combination. Which of the following dates is the date of initiation of the plan for this business combination?
a. A consulting firm arrangers a meeting between the officers and directors of the two companies on Januarys 5, 2019.
b. A public announcement is made on March 1, 2019 that the exchange ratio will be 1.2 to 1.
c. Stockholders are notified that the officers of the two companies have agreed upon the 1.2 to 1 exchange ratio on March 15, 2019.
d. Stockholders of the two companies are to vote to accept the terms of the proposed business combination on May 15, 2019.
2. Expenses related to effecting business combination accounted for by the pooling interests method should be:
a. Deducted in determining the net income of the resulting combined corporation for the period in which the expenses are incurred.
b. Capitalized and amortized over a discretionary period elected by management.
c. Charged to retained earnings when incurred
d. Treated as a prior period adjustment.