Final answer:
After an acquisition, the assets and liabilities of the acquired company, including inventories and long-term debt, should be reported at their fair value on the acquisition date, as per GAAP.
Step-by-step explanation:
The question for company X, which acquired all of the outstanding common stock of company Y, regarding how to determine the amounts to be reported for the inventories and long-term debt acquired from company Y, should be answered based on the accountancy principle of 'fair value'.
According to generally accepted accounting principles (GAAP), after an acquisition, the assets and liabilities of the acquired company should be reported at their fair value on the acquisition date. Therefore, both inventories and long-term debt should be measured and reported at fair value. This approach is reflected in option A: Fair value for both inventories and long-term debt.