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Read the following case and answer the following questions as an accountant for the partnership: Lulu Company (Merchandising company) decided to purchase 100% of Raya
Read the following case and answer the following questions as an accountant for the partnership:
Lulu Company (Merchandising company) decided to purchase 100% of Raya company (Real estate company) at the beginning of 2019, both companies are agreed on creating a new company called LR company for real estate and general trading furthermore they agreed on that using the FMV for any exchanging transactions.
Questions:
- What is the Acquisition Method of Accounting used for the Business Combinations? (2.5 Points)
- What is the method of the business combinations used? Why? (2.5 Points)
- Which type of Business Combinations followed in the above case? Why? (2.5 Points)
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