Analyzing Financial Statements L09) 14, s t e economic entity or the parent concept more consistent 1 What effect does each of the three items have on the reported net with the principles addressed in the FASB's conceptual income of the acquired company before the acquisition and orn framework? Explain your answer. the reported net income of the combined company in the first year of the acquisition and future years? O9 15. How does the FASB's conceptual framework influence the development of new standards? 2. What effect does each of the three items have on the cash from LO 9 16. What is the difference between net income, or earnings, and operations of the acquired company before the acquisition and comprehensive income? on the cash from operations of the combined company in the first year of the acquisition and future years? respond to these suggestions? provided by GAAP but would be regarded by many as pushing 3. If you are the manager of the acquired company, how do you Business Ethics From 1999 to 2001, Tyco's revenue grew approximately 24% and it acquired over 700 companies. It was widely rumored that Tyco 4. Assume that all three items can be executives aggressively managed the performance of the compa nies that they acquired by suggesting that before the acquisition, they should accelerate the payment of liabilities, delay recording position as the collections of revenue, and increase the estimated amounts in managed within the - mits of GAAP. Is there an ethical issue? Describe your : (A) an accountant for the target company and (B) as the li reserve accounts. ANALYZING FINANCIAL STATEMENTS