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GESTION: Do the problem piction PACT 1. An investor would not be using the equity method to account for in Inventmem it A) It has the ability to exercise significant Influence over the operating policies of the news B) It records receipt of investee dividends as a reduction of the Investment account. C) The investor prefers to account for the investment by making all pertinent adjusting entries within the investor's books so they have a one-line consolidation within their net Income. Dj It owns 30 of an investee's stock but one other investor owns 70% of the Invented's wod 2. At the date of acquisition, under the acquisition method, the parent; A) Consolidates the subsidiary's assets at fair value and the liabilities at book value. 3) Consolidates all subsidiary assets and liabilities at fair value. C) Consolidates the subsidiary's assets and liabilities at book value and the parent's assets and lablines at fair value. D) Consolidates all subsidiary assets and liabilities at book value. 3. Edwar Co. paid cash for all of the voting common stock of samuels Corp. Samuels will continue to exist as a separate corporation. Entries for the consolidation of Edwar and Samwels would be recorded: Aj in Samuels' financial records. B) in Edwar's general journal. C) in a worksheet. D) in Samuels' subsidiary ledger. 4. Using the acquisition method for a business combination, goodwill is recorded. A) Based on the consideration transferred for the investment, less the subsidiary's fair value at acquisition date. B) Based on the price paid for the investment, less the subsidiary's book value at the acquisition date. C) Based on the amount of goodwill at the acquisition date, less the annual amortization. D) Every time a financial statement is issued, based on the current market value of the parent. 5. Direct combination costs such as legal and accounting fees, and amounts incurred to register and issue stock in connection with a business combination, should be accounted for under the acquisition method by: A) Direct combination costs must be added to the consideration transferred under the acquisition method B) Amounts incurred to register and issue stock must be expensed, as incurred. C) Amounts incurred to register and issue stock must be deducted from additional paid in capital D) Direct combination costs must be capitalized as incurred. 6. In a statutory merger through asset acquisition, which of the following is true? A) Both entities remain in existence. B) Only the acquiring company remains in existence. C) The acquiring company only acquires assets of the acquired company. D) The acquiring company dissolves and goes out of business