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Megamedia Corp acquired 100% of Millenia Corp. The total consideration is agreed upon, but the...

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Accounting

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Megamedia Corp acquired 100% of Millenia Corp. The total consideration is agreed upon, but the exact nature of Megamedia Corp's payment is not yet fully specified. This business combination is accounted for under the acquisition method. It is expected that at the date of the business combination, the fair value will exceed the book value of Millenia Corp's net asset value. Megamedia Corp desires to prepare consolidated financial statements that include the financial statements of Millenia Corp (a) Discuss the key differences between the pooling method and the acquisition (8 marks) Discuss what determines the choice of accounting method when accounting for (5 marks) method in accounting for a business combination (b) (c) On acquisition date, the book values of the 2 companies are as follows: Current assets (assume cash Other assets Total assets Megamedia Corp $48,000 $32,000 $80,000 Millenia Corp $16,000 $8,000 $24,000 Current iabilities Common stock Retained eamings Total liabilities & equity $40,000 $28,000 $12,000 $80,000 $14,000 $6,000 $4,000 $24,000

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