Quiz 3
docx
keyboard_arrow_up
School
Indiana Institute of Technology *
*We aren’t endorsed by this school
Course
4700
Subject
Accounting
Date
Apr 3, 2024
Type
docx
Pages
4
Uploaded by Funsizedmom
Par Industries owns 7,000,000 shares of Sub Corporation's outstanding common stock (a 70 percent interest). The remaining 3,000,000 outstanding
common shares of Sub are held by Ott Insurance Company. On Par Industries' consolidated financial statements, Ott Insurance Company is considered:
An associated company
, Not Selected
An investee
, Not Selected
Correct answer:
A noncontrolling interest
An affiliated company
, Not Selected
Results for question 2.
2
0 / 1 point
The noncontrolling interest share that appears in the consolidated income statement is computed as follows:
The subsidiary's income less amortization of fair/book value differentials is multiplied by the noncontrolling interest percentage.
, Not Selected
Subsidiary net income is subtracted from consolidated net income.
, Not Selected
Subsidiary income determined for consolidated statement purposes is multiplied by the noncontrolling interest percentage.
, Not Selected
Incorrect answer:
Consolidated net income multiplied by the noncontrolling interest percentage.
Results for question 3.
3
1 / 1 point
According to GAAP regarding amortization of goodwill, which of the following statements is true?
Correct answer:
Goodwill recognized in consolidation will not be amortized but is subject to an annual test for impairment
Goodwill recognized in consolidation must be amortized over 20 years
, Not Selected
Goodwill recognized in consolidation must be expensed in the period of acquisition.
, Not Selected
Goodwill recognized in consolidation can never be written off
, Not Selected
Results for question 4.
4
1 / 1 point
The retained earnings that appear on the consolidated balance sheet of a parent company and its 60 percent-owned subsidiary are:
The subsidiary's retained earnings
, Not Selected
The parent company's retained earnings plus 60 percent of the subsidiary's retained earnings
, Not Selected
Correct answer:
The parent company's retained earnings
The parent company's retained earnings plus 100 percent of the subsidiary's retained earnings
, Not Selected
Results for question 5.
5
1 point possible
Parent acquired 80% of Sub on January 1, 2011 for $2,800,000. On this date the capital stock and retained earnings of the two companies were as follows
(in thousands):
Parent Sub
Capital stock $7,200 $2,000
Retained earnings 3,200 400
The assets and liabilities of Sub were stated at FV = BV when Parent acquired its 80% interest. Net income and dividends for 2011 for the affiliated companies were as follows:
Parent Sub
Net income $1,200 $ 360
Dividends paid 360 100
Calculate the amount of Capital stock that would appear in the consolidated balance sheet on December 31, 2011:
Waiting for grade
The amount of capital stock that is calculated on the consolidated inceom statement would be $7,200. Because the capital stock and retained earnings for the sub are not added to the parent.
Waiting for grade
Results for question 6.
6
1 point possible
Parent acquired 80% of Sub on January 1, 2011 for $2,800,000. On this date the capital stock and retained earnings of the two companies were as follows
(in thousands):
Parent Sub
Capital stock $7,200 $2,000
Retained earnings 3,200 400
The assets and liabilities of Sub were stated at FV = BV when Parent acquired its 80% interest. Net income and dividends for 2011 for the affiliated companies were as follows:
Parent Sub
Net income $1,200 $ 360
Dividends paid 360 100
Calculate the amount of Goodwill that would appear in the consolidated balance sheet on December 31, 2011:
Waiting for grade
2,800-2,000-400 = $400 in goodwill
Waiting for grade
Results for question 7.
7
1 point possible
Question
Waiting for grade
$3,200 would be the value of retained earnings for the consolidated income statement. The subs retained earnings are not added to the consolidated income statement.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Waiting for grade
Results for question 8.
8
1 point possible
Who are the primary users for which consolidated financial statements are intended?
Waiting for grade
The investors and stockholder's of the parent company are the primay users of the consolidated income statement.
Waiting for grade
Results for question 9.
9
1 point possible
What is a noncontrolling interest?
Waiting for grade
A noncontrolling interest is the amount of the sub that the parent does not have control over. If the parent company owns 80% of the sub then the remaining 20% is the noncontrolling interest.
Waiting for grade
Results for question 10.
10
0 / 1 point
Consolidated workpaper adjustments and eliminations are recorded as follows:
In the consolidated workpapers and posted to the subsidiary's records
, Not Selected
In the consolidated workpapers and posted to both the parent's and the subsidiary's records
, Not Selected
In the consolidated workpapers only and are not recorded in either the parent's or the subsidiary's individual books
, Not Selected
Incorrect answer:
In the consolidated workpapers and posted to the parent's records
Related Questions
1. Coloma Limited reports Non-controlling interests within the equity section of its statement of financial position.
Which of the following statements is incorrect?
A.Coloma Limited has prepared consolidated financial statements.
B.Coloma Limited holds more than 50%, but less than 100%, of the shares in another company.
C.All of these statements are correct.
D.Coloma Limited has shareholders from a subsidiary.
E.Coloma Limited is a parent entity.
2. Which of the following would not be considered an external user of General Purpose Financial Reporting?
A.Chief executive officer
B.Creditors
C.Competitors
D.Administrative staff
E.Shareholders
arrow_forward
Please help me
arrow_forward
I just need help with Part B section A, I have all the figures except NCI in NI of Station comp, Investment in Station company, and NCI in NA of Station comp.
arrow_forward
Please don't give image based answer..thanku
arrow_forward
Seseg Appliances owns 90% of the voting stock of Juan Co. Of the three following statements, which of the statements are true? Statements: (1) The financial statements of Seseg would be consolidated into Juan (2) Seseg would be considered the parent entity (3) Juan would be considered the parent entity
A. 1 is true
B. 2 is true
C. 3 is true
D. None of the above are true
arrow_forward
Please help me
arrow_forward
17.
Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 31,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred:
Cost
Book Value
Fair Value
Cash
$ 25,000
$ 25,000
$ 25,000
Inventory
78,000
78,000
78,000
Land
63,000
63,000
93,000
Buildings
180,000
132,000
258,000
Equipment
92,000
76,000
124,000
Accounts Payable
61,000
61,000
61,000
Required:
Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon
Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.
arrow_forward
8
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Related Questions
- 1. Coloma Limited reports Non-controlling interests within the equity section of its statement of financial position. Which of the following statements is incorrect? A.Coloma Limited has prepared consolidated financial statements. B.Coloma Limited holds more than 50%, but less than 100%, of the shares in another company. C.All of these statements are correct. D.Coloma Limited has shareholders from a subsidiary. E.Coloma Limited is a parent entity. 2. Which of the following would not be considered an external user of General Purpose Financial Reporting? A.Chief executive officer B.Creditors C.Competitors D.Administrative staff E.Shareholdersarrow_forwardPlease help mearrow_forwardI just need help with Part B section A, I have all the figures except NCI in NI of Station comp, Investment in Station company, and NCI in NA of Station comp.arrow_forward
- Please don't give image based answer..thankuarrow_forwardSeseg Appliances owns 90% of the voting stock of Juan Co. Of the three following statements, which of the statements are true? Statements: (1) The financial statements of Seseg would be consolidated into Juan (2) Seseg would be considered the parent entity (3) Juan would be considered the parent entity A. 1 is true B. 2 is true C. 3 is true D. None of the above are truearrow_forwardPlease help mearrow_forward
- 17. Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 31,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cost Book Value Fair Value Cash $ 25,000 $ 25,000 $ 25,000 Inventory 78,000 78,000 78,000 Land 63,000 63,000 93,000 Buildings 180,000 132,000 258,000 Equipment 92,000 76,000 124,000 Accounts Payable 61,000 61,000 61,000 Required: Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.arrow_forward8arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you