BUSINESS COMBINATIONS - REVERSE

ACQUISITIONS (BSA22A2_ACCTNG ON
BUSS COMBINATIONS_AY2020-2021)
An asynchronous activity in BUSCOM - 22M1 (May 10, 2021) (IGNORE PESO SIGN)
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Points:
31/45
1.A business entity who wants to be publicly listed must either register or acquire
shares from a _________.Single line text.
(1/1 Point)
Publicly listed entity

2.In a reverse acquisitions, the acquirer is the entity that issues the required number of
shares that it wants to acquire to obtain controlling interest after the business
combination, whereas, the acquiree is the entity that that issues the number of shares
being required by the acquirer following the required ratio. True or false.Single line
text.
(1/1 Point)
False

3.In determining the goodwill in a reverse acquisition, the entity that issues securities
is called the ______.Single line text.
(0/1 Point)

Correct answers: accounting acquirer

4.Assume the accounting acquirer issued 2,500 shares at P100 par value representing
50% of its total share after the combination, what is the goodwill if the fair value of the
accounting acquiree's assets and liabilities are P900,000 and P600,000 respectively?
Single line text.
(0/1 Point)

Correct answers: 0,None,zero
5.In order to maintain ownership in the combined entity, how many shares should be
issued by the accounting acquirer to the accounting acquiree in exchange of the
 shares issued by the accounting acquiree? Assume the shares issued represent 65% at
the ratio of 1:4 or 52,000 shares.Single line text.
(5/5 Points)
7,000

6.In a reverse acquisition, the entity is called the accounting acquirer because of the
______ it gain from the accounting acquiree.Single line text.
(0/3 Points)

Correct answers: control
7.The difference between the total shares held by the accounting acquirer after the
business combination and the shares issued to the accounting acquiree represents the
_________ of the accounting acquirer.Single line text.
(0/5 Points)

Correct answers: outstanding shares issued,currently issued shares,current shares,outstanding shares

8.What effect will it bring to the goodwill when an identifiable asset of the acquiree
was not taken up in the books? Assume that adjustment shall be taken retrospectively.
Give the answer in one word only.Single line text.
(2/2 Points)
Increase

9.An identifiable asset whose amount was provisionally assigned shall ________ the
goodwill which was provisionally computed and if its fair value was determined to be
higher after the valuation report was made.Single line text.
(2/2 Points)
Decrease

10.In computing goodwill in a business combinations involving provisional amounts,

debiting the asset as an adjustment means the provisional amount assigned to the
asset is ________.Single line text.
(2/2 Points)
Less

11.In relation to number 10, the goodwill before adjustment is P1,000, what is the
adjusted goodwill if the adjustment is P200?Single line text.
(2/2 Points)
800

12.The change in the amount of goodwill is due to the increase or decrease in

considerations or the _____.Single line text.
(2/2 Points)
et identifiable assets acquired

13.If the consideration transferred after the acquisition date is greater than the
provisional amount, the same amount of the increase in the provisional fair value of
 net identifiable assets, then, the amount of adjusted goodwill shall be ________.Single
line text.
(0/2 Points)

Correct answers: the same,same

14. A correction of mistakes made from previous years is adjusted by a debit/credit to
________. Put "Debit" or "Credit" before your answer.Single line text.
(2/2 Points)
Debit Retained earnings

15.A provisional amount would either ________ or ________ a goodwill after an

information is obtained beyond the measurement period. Put "or" to your
answer.Single line text.
(2/2 Points)
Increase or decrease

16.The exchange of equity interest in a business is usually accomplished by an acquirer

that issues equity securities to the acquiree. In a reverse acquisition, the _______ is how
it shall be described.Single line text.
(1/1 Point)
Opposite

17.In the given example concerning the accounting acquiree, ABC acquired XYZ by
issuing 5 shares for every shares owned by XYZ. The resulting number of shares
represent the ownership interest of the _____.Single line text.
(0/2 Points)

Correct answers: accounting acquiree

18.In the illustration cited, ABC's issuance of 40,000 shares represent 80% ownership
interest in theSingle choice.
(3/3 Points)
Business combination
ABC's capital structure
XYZ's capital structure
ABC's equity structure
Correct answers: ABC's equity structure
19.The number of shares issued by XYZ to ABC increased to ____________due to the
business combination.Single line text.
(3/3 Points)
10,000

20.The decrease in goodwill could mean an increase of an identifiable assets because

of provisional amount and assets __________.Single line text.
(3/3 Points)
Unrecorded

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