Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 6, Problem 2P
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Identify the appropriate answer for the given statement from the given choices.
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On July 1, Zamora Inc. agreed to sell the assets of its Golfright Division to Benito Inc. for $71 million.
The following additional facts pertain to the transaction:
• The Golfrignt Division qualifies as a component of the entity according to GAAP regarding discontinued operations.
• The book value of the Golfright's assets totaled $45 million on the date of the sale.
Golfright's operating income was a pre-tax loss of $160 million in 2020.
• Zamora's income tax rate is 40%.
Suppose that the Golfright Division's assets had not been sold by December 31, 2020, but were considered held for sale. Assume that the fair value
of these assets at December 31 was $71 million.
Calculate the amount of loss from discontinued operations Zamora Inc. will report in the income statement for 2020. (Please input answer without the
millions, i.e. 100 million would be entered as 100)
The Lampard Company acquired a 70% interest in The Ohau Company for P1,960,000 when the fair value of Ohau's identifiable assets and liabilities was P700,000 and elected to measure the noncontrolling interest at its share of the identifiable net assets. Annual impairment reviews of goodwill have not resulted in any impairment losses being recognized. Ohau's current statement of financial position shows share capital of P100,000, a revaluation reserve of P300,000 and retained earnings of P1,400,000. Under IFRS3 Business combinations, what figure in respect of goodwill should now be carried in Lampard's consolidated statement of financial position?
P160,000 b. P700,000 c. P1,260,000 d. P1,470,000
Peter, Incorporated owns 100% of The Rock Company. The book value of the Goodwill is $300,000. When Peter made its investment, The Rock had a fair value of $2,800,000. Today, the value of The Rock has fallen to $2,250,000. An appraisal of The Rock’s net assets reveals a fair value of $2,075,000. How much “impairment” should Peter record related to its investment in The Rock?
Chapter 6 Solutions
Advanced Accounting
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Problems 7 and 8 are based on the following...Ch. 6 - Prob. 8PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42P
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