Business, 16.05.2020 07:57 orlando19882000

PMC Corporation acquired all of the stock of SVB Company, at an acquisition cost of $10 million in cash. SVB's book value at the time was $8 million. SVB's net assets are reported at amounts approximating market value at the date of acquisition. However, it has previously unreported brand names and favorable lease agreements, valued at $3 million. Which of the following is true concerning consolidation of PMC and SVB at the date of acquisition?
a. Eliminating entry (E) reduces the investment by $10 million.
b. Eliminating entry (R) creates a bargain gain of $1 million, to be reported on the consolidated balance sheet.
c. PMC reports its investment in SVB, on its own books, at $11 million.
d. Eliminating entry (R) values the previously unreported identifiable intangible assets at $2 million.

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PMC Corporation acquired all of the stock of SVB Company, at an acquisition cost of $10 million in c...

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