Question 11 Subsequent to an acquisition, the parent company and consolidated financial statement amounts would not be the same for Answers: A. investments in consolidated subsidiaries. B. ending retained earnings. C. investments in unconsolidated subsidiaries. D. capital stock.
Question 11 Subsequent to an acquisition, the parent company and consolidated financial statement amounts would not be the same for Answers: A. investments in consolidated subsidiaries. B. ending retained earnings. C. investments in unconsolidated subsidiaries. D. capital stock.
Question 11 Subsequent to an acquisition, the parent company and consolidated financial statement amounts would not be the same for Answers: A. investments in consolidated subsidiaries. B. ending retained earnings. C. investments in unconsolidated subsidiaries. D. capital stock.
Subsequent to an acquisition, the parent company and consolidated financial statement amounts would not be the same for
Answers:
A.
investments in consolidated subsidiaries.
B.
ending retained earnings.
C.
investments in unconsolidated subsidiaries.
D.
capital stock.
Question 12
Under the provisions of ASC 805-30, in a business combination, when the investment cost exceeds the total fair value of identifiable net assets acquired, which of the following statements is correct?
Answers:
A.
The difference is allocated first to reduce proportionately (according to market value) non-current, depreciable assets to zero, and any negative remainder is classified as a deferred credit.
B.
The difference is allocated first to reduce proportionately (according to market value) non-current assets, and any negative remainder is classified as an extraordinary gain.
C.
The difference is allocated first to reduce proportionately (according to market value) non-current assets, then to non-monetary current assets, and any negative remainder is classified as a deferred credit.
D.
The excess is first assigned to identifiable net assets according to their fair values; then the rest is assigned to goodwill.
Question 13
A newly acquired subsidiary had pre-existing goodwill on its books. The parent company's consolidated balance sheet will
Answers:
A.
always show the pre-existing goodwill of the subsidiary at its book value.
B.
not show any value for the subsidiary's pre-existing goodwill.
C.
treat the goodwill similarly to other intangible assets of the acquired company.
D.
not show any value for the pre-existing goodwill unless all other assets of the subsidiary are stated at their full fair value.
Question 14
Pyming Corporation accounts for its 40% investment in Sillabog Company using the equity method. On the date of the original investment, fair values were equal to the book values except for a patent, which cost Pyming an additional $40,000. The patent had an estimated life of 10 years. Sillabog has a steady net income of $20,000 per year and consistently pays out 40% of its net income as dividends to its shareholders. Which one of the following statements is correct?
Answers:
A.
The net change in the investment account for each full year will be a debit of $8,000.
B.
The net change in the investment account for each full year will be a debit of $800.
C.
The net change in the investment account for each full year will be a debit of $4,800.
D.
The net change in the investment account for each full year will be a credit of $800.
Question 15
What is the amount of consolidated Retained Earnings?
Answers:
A.
$304,000
B.
$224,000
C.
$224,000
D.
$324,000
Question 16
A parent corporation owns 55% of the outstanding voting common stock of one domestic subsidiary. The parent has control over the subsidiary. Which of the following statements is correct?
Answers:
A.
The parent corporation must use the fair value method.
B.
The parent corporation must prepare consolidated financial statements for the economic entity.
C.
The parent company may use the equity method but the subsidiary cannot be consolidated.
D.
The parent company can use the equity method or the fair value/cost method.
Question 17
With respect to goodwill, an impairment
Answers:
A.
is a two-step process which first compares book value to fair value at the business reporting unit level.
B.
occurs when asset values are adjusted to fair value in a purchase.
C.
will be amortized over the remaining useful life.
D.
is a one-step process considering the entire firm.
Question 18
Sadie Corporation's stockholders' equity at December 31, 2013 included the following:
6% Preferred stock, $10 par value $1,000,000
Common stock, $1 par value 10,000,000
Other paid-in capital—common 4,000,000
Retained earnings 4,000,000
$19,000,000
Pilga Corporation purchased a 30% interest in Sadie's common stock from other shareholders on January 1, 2014 for $5,800,000. What was the book value of Pilga's investment in Sadie on January 1, 2014?
Answers:
A.
$5,700,000
B.
$7,120,000
C.
$5,400,000
D.
$7,440,000
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
