User Which of the following is true about the Determination and Distribution Schedule? a/ Itmeasures the excess of the fair value of the subsidiary over the fair value of net identifiableassets b/ It determines the value of goodwill or gain on acquisition that should be recorded bythe parent c/ All of these are true. d/ It is prepared once only on the date of acquisition andused to prepare the consolidation entries in the following periods

a) It measures the excess of the fair value of the subsidiary over the fair value of net…

Answered: User Which of the following is true…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Tanner Company, a subsidiary acquired for cash, owned Furniture with a fair value higher than the book value as of the date of combination. A consolidated balance sheet prepared immediately after the acquisition would include this difference in: Select one: a. Furniture b. retained earnings c. differential d. goodwill
for the following intercompany transaction state the principle to be used in accounting for intercompany gains on current and future consolidated income statements: Gains on the sale of depreciable fixed assets
What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following: Total equity Now assume this transaction had been completed prior to the elimination of poolings of interest, and that the pooling method had been used to record the acquisition. Redo requirements 1 and 2: Total assets Total liabilities Total equity
Which consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.
Record the basic consolidation entry and the amortized excess value reclassification entry. And also record the excess value (differential) classification entry and the optional accumulated depreciation consolidation entry. Prepare a three-part consolidation worksheet for 20X9.
Consolidated Worksheet Preparation You will be creating and entering formulas to complete four worksheets. The first objective is to demonstrate the effect of different methods of accounting for the investments (equity, initial value, and partial equity) on the parent company’s trial balance and on the consolidated worksheet subsequent to acquisition. The second objective is to show the effect on consolidated balances and key financial ratios of recognizing a goodwill impairment loss. Project Scenario Pecos Company acquired 100 percent of Suaro’s outstanding stock for $1,450,000 cash on January 1, 2017, when Suaro had the following balance sheet:(THIS IS IN THE PICTURE) Following is the consolidated information worksheet. December 31, 2018, trial balances Pecos Suaro revenues $ (1,052,000) $ (427,000) operating expenses $ 821,000 $ 262,000 goodwill impairment loss ? income of Suaro ? net income ? $…
What important issues should management consider prior to a merger or acquisition? What are the current GAAP requirements for the type of merger/acquisition?
When the parent's Investment in S account is eliminated in the consolidation process, what replaces this item on the consolidated financial statements? A) The acquisition-date fair values of S's net assets, adjusted for any post-acquisition amortization of Differential. B) The acquisition-date book values of S's net assets, adjusted for any post-acquisition amortization of Differential. C) The book value of S's net assets and S's beginning retained earnings only. D) Only the new goodwill generated from the transaction.
16.Explain the process of accounting for mergers and acquisitions. How are the assets and liabilities of the acquired company recorded on the balance sheet of the acquiring company? Discuss the treatment of goodwill and any adjustments that might be necessary post-acquisition. Provide an example of a hypothetical merger and the journal entries that would be recorded.
If a seller makes an intra-entity sale of a depreciable asset at a price above book value, the seller’s beginning Retained Earnings is reduced when preparing each subsequent consolidation. Why does the amount of the adjustment change from year to year?

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