Question One: True /False Questions:(6 marks) (A1, C1)

• All out-of-pocket costs of a business combination reduce additional paid-in capital of the combinor. _________
• On the date of a business combination resulting in a parent-subsidiary relationship, the differences between current fair values and carrying amounts of the subsidiary's identifiable net assets are included in a working paper elimination. __________
• Under the parent company concept of consolidated financial statements, the minority interest in net assets of a subsidiary is displayed as a liability. _________
• Carrying amounts of the combinee's identifiable net assets are disregarded in accounting for a business combination. __________
• Only the balance sheet is consolidated on the date of a business combination of a parent company and subsidiary. ________
• In a business combination resulting in a parent company-subsidiary relationship, the parent company's Investment in Subsidiary Common Stock ledger account balance is eliminated with a working paper elimination for the working paper for consolidated balance sheet. _____________