When one entity controls another entity, the business combination results in which type of relationship? A. Parent-subsidiary B. Partnership C. A merger D. Head office- Branch 2) In a business combination, the acquiree is the party that: A. Pays the acquisition consideration. B. Finances the business combination. C. Gives up control over the net assets acquired. D. Obtains control of the net assets the other entity 3) In a business combination, costs paid for registering and issuing equity securities are: A. Added to the parent/investor company's investment account B. Deducted from share premium (APIC) C. Deducted from income in the period of combination D. Reduced from the parent company's investment account 4) Which of the following accounts is not displayed in the consolidated financial position? A. Common stock of a parent company B. Retained earnings of a parent company C. Common stock of subsidiary D. Non-controlling Interest 5) When one company acquires less than 50% but more than 20% of voting outstanding stock of another company then the company A. Has controlling power B. Has no significant influence C. Has significant influence but not control D. Neither significant influence nor controlling power 6) Palm paid 300,000 on Jan 2015 to acquire 100% of Pear Co. On that date Pear had issued and outstanding100,000 ordinary shares of 2. Identify the goodwill in Pear in each of the following alternative situations. On Jan 2015 Pear's retained earnings were 30,000 and the fair values of its identifiable assets were the same as their book value. A. 200,000 B. 170,000 C. 70,000 D. 212,500 7) The value of the assets and liabilities is reflected in the financial statements on the acquisition date of a business combination at? A. Carrying value B. Fair value C. Book value D. Average value