Chapter 2, Problem 2C

1.

a.

To determine

Discuss the reasons due to which the goodwill amortization increases net income of country A but decreases the net income of country B.

b.

To determine

Discuss the reason due to which the goodwill adjustment increases the stockholders’ equity in country A but decreases in country B.

c.

To determine

Discuss the reason due to which adjustments of stockholders’ equity are larger than the adjustments to income.

2.

a.

To determine

Discuss the reason for two separate adjustments to income related to interest.

b.

To determine

Discuss the reason for adjustment to income for capitalized interest increase income, whereas, the adjustment for depreciation related to capitalized interest decreases income.

c.

To determine

Discuss the reason for positive adjustment to stock holders’ equity for capitalized interest is smaller than the positive adjustment to income for capitalized interest.

3.

a.

To determine

Discuss the reason for decrease in income due to adjustments for depreciation related to revalued fixed assets and the reason for increase in stockholders’ equity due to the adjustment for revaluation of fixed assets.