When there is a merger, which of the following will occur?

A) A merger occurs when one corporation takes over the operations of another business entity, and the acquired entity is dissolved.

B) None of the business entities will be dissolved.

C) The acquired assets will be recorded at book value by the acquiring entity.

D) None of the above is correct.

Michelangelo Co. paid $100,000 in fees to its accountants and lawyers in acquiring Florence Company. Michelangelo will treat the $100,000 as A) an expense for the current year. B) a prior period adjustment to retained earnings. C) additional cost to investment of Florence on the consolidated balance sheet. D) a reduction in paid-in capital.

According to FASB 141, which one of the following items may not be accounted for as an intangible asset apart from goodwill?

A) A production backlog.

B) A talented employee workforce.

C) Non-contractual customer relationships.

D) Employment contracts.