Question 1 (20 Marks) A-Choose the correct answer: In your answer sheet, write down the letter corresponding to the correct answer in the table provided below: (8 Marks) (1) A business merger differs from a busmess consolidation bscause a) a merger dissolves all but one of the prior entities, but a consolidation dissolves all of the prior entities and forms a new corporation. b) a consolidation dissolves all but one of the prior entities, but a merger dissolves all of e) a merger is created when two entities join, but a consolidation is created when more than the prior entities. d) a consolidation is created when two entities join, but a merger is created when more two entities join. than two entities join. (2) Which of the following is not a reasen for a compony to expand through a combination, rather than by building new ficilities? a) a combination might provide cost advantages. b) a combination might provide fewer operating delays. c) a combination might provide easier access to intangible assets. d) a combination might provide an opportunity to invest in a company without having to take responsibility for its financial results. (3) Pitch Co, paid $50,000 in fes to its accountants and lawyers in acquiring Slope Comgany. Pitch will treat the $50,000 as a) an expense for the current year. b) a prior period adjustment to retained earnings. c) additional cost to investment of Slope on the consolidated balance sheet. d) a reduction in additional paid-in capital. (4) Under the curtent GAAP, Gondwill arising from a business combination is a) charged to Retained Earnings after the acquisition is completed. b) amortized over 40 years or its useful life, whichever is longer. c) amortized over 40 years or its useful life, whichever is shorter. d) never amortized: B o-..nnthake Snorting Goods had net assets consisting of the following: Pedic Incorporated purchased Samantha's Sporting Goods, and immediately dissolved Samantha's as a separate legal entity. If Samantha's was plohased for $1,000,000 cash, prepare the joumal entries to record Required: (12 Marks) the business combination on the books of Pedic. Spring 2022-2023 B326 MTA V.1 Page 2 of 3