The adoption of a single set of financial accounting standards is important for multinational companies because:

1. A single set of reporting standards should result in consolidated financial statements that are more comparable across organizations operating in different countries

2. A single set of reporting standards should result in a more simplified method of consolidating financial statements

3. A single set of reporting standards should eliminate the need to separately maintain accounting records for both controlling and non-controlling interests

4. A single set of reporting standards should decrease the need for accounting professionals with knowledge of language differences

In 2005 Sprint Corp. acquired Nextel Communications at a cost of $35 billion. The combination of the two U.S. based companies resulted in the third largest telecommunications company. While Nextel had a strong reputation for its services to businesses, Sprint was unfortunately known for poor customer service. The two companies had very different management styles, Nextel was entrepreneurial and Sprint was bureaucratic. Which of the following statements is most likely true?

A. The merger failed because it is inadvisable to combine two very large organizations that have different styles B. The merger failed because of language differences, differences in accounting standards, and differences in culture C. Mergers between organizations in the same country only have to contend with financial and economic factors, not differences in corporate culture D. Mergers involving domestic organizations have some of the same considerations as mergers involving foreign organizations

On June 30, 2014, PC Company purchased all of the common stock of Silicon Company by issuing 100,000 shares of its $1 par value common stock, with a market value of $25/share. PC Company incurred $400,000 in registration and issuing costs, and $250,000 in consulting and legal fees, paid in cash. The book value of Silicon Company at the date of acquisition was $1,000,000, consisting of capital stock of $560,000, retained earnings of $280,000 (credit balance), treasury stock of $35,000, and accumulated other comprehensive income of $195,000 (credit balance). The carrying values of Silicons reported assets and liabilities approximate fair value, but it has $700,000 in customer lists, not reported on its balance sheet. The acquisition results in:

A. Goodwill in the amount of $ 800,000 B. A bargain in the amount of $1,500,000 C. Goodwill in the amount of $1,500,000 D. Goodwill in the amount of $1,200,000

C and D share income in a 1:4 ratio, and have capital balances of $100,000 and $60,000 respectively. Book value of total assets is $300,000. Liabilities total $140,000. Sale of all assets results in total available cash of $180,000. The amount to be distributed to partner C upon liquidation is:

A. $40,000 B. $36,000 C. $ 8,000 D. $76,000

E. Neither a bargain nor goodwill results from the acquisition