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Study Resources (Accounting)

12) Paulee Corporation paid $24,800 for an 80% interest in Sergio Corporation on January 1, 2010, at which time Sergio's stockholders' equity consisted of $15,000 of Common Stock and $6,000 of Retained Earnings. The fair values of Sergio Corporation's assets and liabilities were identical to recorded book values when Paulee.
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Multiple Choice Questions 1) The material sale of inventory items by a parent company to an affiliated company A) enters the consolidated revenue computation only if the transfer was the result of arm's length bargaining. B) affects consolidated net income under a periodic inventory system but not under a perpetual inventory system. C) does.
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16) On January 1, 2011, Palling Corporation purchased 70% of the common stock of Sam's Storage Systems for $320,000 when Sam's had Common Stock outstanding of $100,000 and Retained Earnings of $200,000. Any excess differential was attributed to goodwill. At the end of 2011, Palling and Sam's had unrealized inventory profits.
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8) Pexo Industries purchases the majority of their raw materials from a wholly-owned subsidiary, Springmade Chemicals. Pexo purchased Springmade to assure supply availability at a time when the materials were being rationed in the industry due to supply issues overseas. Pexo was able to purchase Springmade at the book value.
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Exercises 1) Separate company and consolidated income statements for Pitta and Sojourn Corporations for the year ended December 31, 2011 are summarized as follows:      Pitta                   Soujourn    Consolidated   Sales Revenue$ 500,000$ 100,000$ 600,000 Income from Sojourn19,900 Bond interest income6,000 Gain on bond retirement3,000 Total revenues519,900106,000603,000 Cost of sales$ 280,000$  50,000$ 330,000 Bond interest.
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Multiple Choice Questions Use the following information to answer the question(s) below. In 2011, Parla Corporation sold land to its subsidiary, Sidd Corporation, for $38,000. It had a book value of $24,000.  In the next year, Sidd sold the land for $41,000 to an unaffiliated firm. 1) Which of the following is correct? A).
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19) Pare Corporation owns 65% of the outstanding voting stock of Summer Corporation. On January 1, 2011, Pare purchased $4,000,000 of bonds that were originally issued by Summer several years earlier. The ten-year bonds have a 5% interest rate, and pay interest each December 31. The bonds were originally issued at.
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6) Perry Instruments International purchased 75% of the outstanding common stock of Standard Systems in 1997 when the book values and fair values of Standard's assets and liabilities were equal.  The cost of Perry's investment was equal to 75% of the book value of  Standard's net assets. Separate company income.
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3) Pollek Corporation paid $16,200 for a 90% interest in Swamp Corporation on January 1, 2011, when Swamp stockholders' equity consisted of $10,000 Capital Stock and $3,000 of Retained Earnings. The excess cost over book value was attributable to goodwill. Additional information: 1.Pollek sells merchandise to Swamp at 120% of Pollek's cost..
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19) Presented below are several figures reported for Plate Corporation and Saucer Industries as of December 31, 2011.  Plate has owned 70% of Saucer for the past five years, and at the time of purchase, the book value of Saucer's assets and liabilities equaled the fair value.  The cost of.
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Exercises 1) Pigeon Company owns 80% of the outstanding stock of Spiniflex Corporation, which was purchased on January 1, 2006, when Spiniflex's book values were equal to its fair values. The amount paid by Pigeon included $16,000 for goodwill. On January 1, 2007, Pigeon purchased a truck for $40,000 which had no.
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6) Snow Company is a wholly owned subsidiary of Penguin Corporation.  On January 1, 2009, Penguin transferred equipment to Snow for $195,000.  The equipment had originally cost $250,000, but at the time of transfer, had a $180,000 book value and a five year remaining life.  Both companies use the straight-line.
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4) Pheasant Corporation owns 80% of Sal Corporation's outstanding common stock that was purchased at book value equal to fair value on January 1, 2005. Additional information: 1.Pheasant sold inventory items that cost $3,000 to Sal during 2012 for $6,000. One-half of this merchandise was inventoried by Sal at year-end. At December.
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19) Plock Corporation, the 75% owner of Seraphim Company, reported net income of $400,000 in 2011, prior to recording any income from Seraphim. Seraphim reported net income for that same year of $80,000 on their stand-alone statements. During 2011, an intercompany sale of a vehicle resulted in a gain of.
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8) Separate income statements of Pingair Corporation and its 90%-owned subsidiary, Staunch Inc., for 2011 were as follows: Pingair Staunch Sales Revenue$2,200,000 $1,000,000 Cost of sales(1,400,000)(600,000) Other expenses(400,000)(200,000) Gain on equipment80,000 Income from Staunch128,000           Net income$608,000 $200,000 Additional information: 1.Pingair acquired its 90% interest in Staunch Inc. when the book values.
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Multiple Choice Questions 1) Which of the following is correct? The direct sale of additional shares of stock at book value per share to only the parent company from a subsidiary A) decreases the parent's interest and decreases the noncontrolling shareholders' interest. B) decreases the parent's interest and increases the noncontrolling shareholders' interest. C).
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Use the following information to answer the question(s) below. Great Corporation acquired a 90% interest in SOS Corporation at its $810,000 book value on December 31, 2010. A summary of the stockholders' equity for SOS at the end of 2010 and 2011 is as follows: 12/31/1012/31/11 Capital stock, $10 par$600,000$600,000 Additional paid-in capital30,00030,000 Retained Earnings270,000420,000 Total.
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13) Separate income statements of Plantation Corporation and its 90%-owned subsidiary, Savannah Corporation, for 2011 are as follows, prior to Plantation recording any income related to its subsidiary: PlantationSavannah Sales Revenue$870,000 $230,000 Gain on equipment35,000 Gain on land20,000 Cost of sales(470,000)(90,000) Other expenses(265,000)(60,000) Separate incomes$170,000 $100,000 Additional information: 1.Plantation acquired its 90% interest in Savannah.
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11) What is Pouch's income from Shenley for 2012? A) $27,200 B) $29,600 C) $39,200 D) $49,000 12) Swamp Co., a 55%-owned subsidiary of Pond Inc., made the following entry to record a sale of merchandise to Pond: Accounts Receivable40,000 Sales Revenue40,000 All Swamp sales are at 125% of cost. One-fourth of this merchandise remained in the Pond's.
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Exercises 1) Penguin Corporation acquired a 60% interest in Squid Corporation on January 1, 2012, at a cost equal to 60% of the book value of Squid's net assets.  At the time of the acquisition, the book values of Squid's assets and liabilities were equal to the fair values. Squid reports.
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11) Parrot Company owns all the outstanding voting stock of Southern Manufacturing.  On January 1, 2012, Parrot sold machinery to Southern at its book value of $24,000.  Parrot had the machinery three years before selling it and used an eight-year straight-line depreciation method, with zero salvage value.  Southern will use.
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