Chapter 1 - Intercorprate Acquisitions and Investments in Other Entities - Exercises and Problems

Chapter 1 - Intercorprate Acquisitions and Investments in Other Entities - Exercises and Problems

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Exercises Page 1 of9 ., Advanced Accounting 9ie Content Financial eBook Chapter1: Intercorporate Acquisitions and Investments .._-------- Exercises in Other Entities ._------ E1-1 Multiple-Choice Questions on Complex Organizations LOi, L03 Select the correct answer for each of the following questions. 1. Growth in the complexity of the U.S. business environment a. Has led to increased use of partnerships to avoid
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legal liability. b. Has led to increasingly complex organizational structures as management has attempted to achieve its business objectives. c. Has encouraged companies to reduce the number of operating divisions and product lines so they may better control those they retain. d. Has had no particular impact on the organizational structures or the way in which companies are managed. 2. Which of the following
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is not an appropriate reason for establishing a subsidiary? a. The parent wishes to protect existing operations by shifting new activities with greater risk to a newly created subsidiary. b. The parent wishes to avoid subjecting all of its operations to regulatory control by establishing a subsidiary that focuses its operations in regulated industries. . c. The parent wishes to reduce its taxes by
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establishing a subsidiary that focuses its operations in areas where special tax benefits are available. d. The parent wishes to be able to increase its reported sales by transferring products to the subsidiary at the end of the fiscal year. 3. Which of the following actions is likely to result in recording goodwill on Randolph Company's books?
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4. When an
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existing company creates a new subsidiary and transfers a portion of its assets and liabilities to the new entity
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