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29. Which of the following statements is true regarding the acquisition method of accounting for a business combination? A. Net assets of the acquired company are reported at their fair values. B. Net assets of the acquired company are reported at their book values. C. Any goodwill associated with the acquisition is reported as a development cost. D. The acquisition can only be effected by a mutual exchange of voting common stock. E. Indirect costs of the combination reduce additional paid-in capital.


30. Which of the following statements is true? A. The pooling of interests for business combinations is an alternative to the acquisition method. B. The purchase method for business combinations is an alternative to the acquisition method. C. Neither the purchase method nor the pooling of interests method is allowed for new business combinations. D. Any previous business combination originally accounted for under purchase or pooling of interests accounting method will now be accounted for under the acquisition method of accounting for business combinations. E. Companies previously using the purchase or pooling of interests accounting method must report a change in accounting principle when consolidating those subsidiaries with new acquisition combinations.


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