If purchase price is less than fair value of the acquired and the acquired firm uses acquistion method theeffect on consolidated income statement will be : a. no change b. higher earnings c. lower earnings
higher earnings… fv - bargain purchase price will be recognized as an immediate gain.
i thought as much but Stalla says C so am confused. most likely its an error
what is the question # on Stalla… do you mind posting that as well>
this is L2-03556 on Stalla. There is an erratum. Answers B and C have been swapped. and C> Higher Earnings is the right answer.