Question

The Whit Company, a manufacturer, and the Berry Company, a retailer, entered into a business combination whereby Whit acquired for cash all the outstanding voting common stock of Berry. Why and under what circumstances should Berry be included in the entity’s consolidated financial statements?

Answer 1

Answer:

Circumstances under which combination will occur are​ :

In the event that the one organization is the auxiliary of other.

In the event that the one organization is a related organization.

In the event that the one organization is a joint endeavor of other organization.

Related organization is the enthusiasm of parent organization in the organization say it has control or enthusiasm for board choice normally 20 or 25 percent are considered.

Joint endeavor organization alludes to the organization framed for particular reason or span. When the predetermined question is accomplished the privileges of the organization are withdrawn.