In the year ended June 30 20X7,Woof Ltd acquired the assets and assumed the liabilities of the Doggie Biscuits operation from Fido Ltd for $10,000,000.At the date of acquisition,the fair values of the net separable assets and liabilities of the operation were $8,000,000 and $1,000,000 respectively.Based on this information,the transaction has resulted in:
A) A business combination of Woof Ltd and Doggie Biscuits.
B) The acquisition of certain assets and liabilities, which is not a business combination since Doggie Biscuits is not a business but simply part of the Fido Ltd business.
C) The acquisition of certain assets and liabilities, which is not a business combination since Doggie Biscuits is not managed to provide a return to investors but only to provide a return to Fido Ltd.
D) None of the above.
Correct Answer:
Verified
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