If a company uses the purchase method to account for a merger, which of the following is true?

I. Prior year's statements must be restated as if merged companies had always been one company.

II. Net income of combined companies will probably be lower than net income of two separate companies added together.

III. Goodwill is never recorded.

IV. Assets of acquired company will be recorded on acquirer's books at their fair value.

A. II, III, and IV

B. I, II, and III

C. II and IV

D. I and III