Course Title: ACCT 4312: Advanced Accounting Instructor: Dr Barbara L’Huillier Name: Yasmeen Al Jishi ID#: 200700687 Chapter 1

A statutory consolidation A stock acquisition Q5. P.37 Distinguish among a statutory merger, a statutory consolidation, and a stock acquisition. Types of Combinations Classified by Method of Acquisition: A statutory merger A statutory consolidation A stock acquisition

A statutory merger: One company acquires all the net assets of another company through an exchange of stock, payment of cash, or issue of instruments. Company A Company B Company A

A statutory consolidation: A new corporation is formed to acquire two or more other corporations through an exchange of voting stock. Company A Company B Company C

Financial Statements of B Company A stock acquisition: One company pays cash or issues stock or debt for all or part of voting stock of another company, and the acquired company remains intact as a separate legal entity. Financial Statements of A Company Financial Statements of B Company Consolidated Financial Statements of A Company and B Company

Q14. P.37 Is the economic entity or the parent concept more consist with the principles addressed in the FASB's conceptual framework? Explain your answer. The parent concept is tied to the historical cost principle, which suggests that the best measure of valuation of a given asset is the price paid. The economic entity assumption views a parent and its subsidiaries as one economic entity even though they are separate legal entities.

The parent concept has more consisted with the principles addressed in the FASB's conceptual framework because it might be argued to produce more “reliable” values. But The economic entity is integral part of the FASB's conceptual framework. Also, it seems to be consistent with the assumptions laid out by the FASB for GAAP.

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