Info
Warning
Danger

Study Resources (Accounting)

2) On December 31, 2011, Paladium International purchased 70% of the outstanding common stock of Sennex Chemical. Paladium paid $140,000 for the shares and determined that the fair value of all recorded Sennex assets and liabilities approximated their book values, with the exception of a customer list that was not.
8 Views
View Answer
Use the following information to answer question(s) below. On January 1, 2011, Punch Corporation purchased 80% of the common stock of Soopy Co. Separate balance sheet data for the companies at the acquisition date(after the acquisition) are given below: PunchSoopy Cash$34,000 $206,000 Accounts Receivable144,00026,000 Inventory132,00038,000 Land68,00032,000 Plant assets700,000300,000 Accum. Depreciation(240,000)(60,000) Investment in Soopy392,000               Total assets$  1,230,000$ 542,000 Accounts payable$206,000$142,000 Capital stock800,000300,000 Retained.
13 Views
View Answer
6) Polaris Incorporated purchased 80% of The Solar Company on January 2, 2011, when Solar's book value was $800,000. Polaris paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of Solar's identifiable assets and.
3 Views
View Answer
17) For 2010, 2011, and 2012, Squid Corporation earned net incomes of $40,000, $70,000, and $100,000, respectively, and paid dividends of $24,000, $32,000, and $44,000, respectively. On January 1, 2010, Squid had $500,000 of $10 par value common stock outstanding and $100,000 of retained earnings. On January 1 of each of.
5 Views
View Answer
16) Pull Incorporated and Shove Company reported summarized balance sheets as shown below, on December 31, 2011.     Pull     Shove Current assets$420,000 $210,000 Noncurrent assets670,000 430,000 Total assets $1,090,000$640,000 Current liabilities$230,000$50,000 Long-term debt   350,000  150 000 Stockholders' equity   510,000  440,000 Total liabilities and equities$1,090,000$640,000 On January 1, 2012, Pull purchased 70% of the outstanding capital stock of.
4 Views
View Answer
13) Pamula Corporation paid $279,000 for 90% of Shad Corporation's $10 par common stock on December 31, 2011, when Shad Corporation's stockholders' equity was made up of $200,000 of Common Stock, $60,000 Additional Paid-in Capital and $40,000 of Retained Earnings. Shad's identifiable assets and liabilities reflected their fair values on.
4 Views
View Answer
Exercises 1) Passerby International purchased 80% of Standaround Company's outstanding common stock for $200,000 on January 2, 2011. At that time, the fair value of Standaround's net assets were equal to the book values. The balance sheets of Passerby and Standaround at January 2, 2011 are summarized as follows: PasserbyStandaround Assets$1,600,000$470,000 Liabilities$840,000$230,000 Capital stock360,00050,000 Retained earnings400,000190,000 Required: .
15 Views
View Answer
Exercises 1) Plum Corporation paid $700,000 for a 40% interest in Satin Company on January 1, 2011 when Plum's stockholders' equity was as follows: 10% cumulative preferred stock, $100 par$  500,000 Common stock, $10 par value300,000 Other paid-in capital 400,000 Retained earnings     800,000 Total stockholders' equity$2,000,000 On this date, the book values of Plum's assets and.
5 Views
View Answer
11) On January 1, 2012, Packaging International purchased 90% of Shipaway Corporation's outstanding shares for $135,000 when the fair value of Shipaway's net assets were equal to the book values.  The balance sheets of Packaging and Shipaway Corporations at year-end 2011 are summarized as follows: PackagingShipaway Assets$590,000$180,000 Liabilities$70,000$30,000 Capital stock360,00090,000 Retained earnings160,00060,000 If a consolidated balance.
16 Views
View Answer
18) On January 1, 2010, Petrel, Inc. purchased 70% of the outstanding voting common stock of Ocean, Inc., for $2,600,000. The book value of Ocean's net equity on that date was $3,100,000. Book values were equal to fair values except as follows: BookFair Assets & LiabilitiesValuesValues Equipment$ 250,000$ 190,000 Building600,000700,000 Note payable270,000240,000 Required: Prepare a schedule to.
14 Views
View Answer
4) Powell Corporation acquired 90% of the voting stock of Santer Corporation on January 1, 2010 for $11,700 when Santer had Capital Stock of $5,000 and Retained Earnings of $4,000. The amounts reported on the financial statements approximated fair value, with the exception of inventories, which were understated on the.
6 Views
View Answer
10) Pool Industries paid $540,000 to purchase 75% of the outstanding stock of Swimmin Corporation, on December 31, 2011. Any excess fair value over the identified assets and liabilities is attributed to goodwill.  The following year-end information was available just before the purchase: PoolSwimmin Swimmin BookBook Fair ValueValueValue Cash$756,000$80,000$80,000 Accounts Receivable260,000152,000152,000 Inventory480,000100,000120,000 Land440,000160,000140,000 Plant and equipment-net1,320,000400,000430,000 $3,256,000$892,000$922,000 Accounts Payable$880,000$22,000$22,000 Bonds.
7 Views
View Answer
Multiple Choice Questions 1) Which of the following will be debited to the Investment account when the equity method is used? A) Investee net losses B) Investee net profits C) Investee declaration of dividends D) Depreciation of excess purchase cost attributable to investee equipment 2) A parent company uses the equity method to account for its.
20 Views
View Answer
18) On January 1, 2011, Pinnead Incorporated paid $300,000 for an 80% interest in Shalle Company.  At that time, Shalle's total book value was $300,000.  Patents were undervalued in the amount of $10,000. Patents had a 5-year remaining useful life, and any remaining excess value was attributed to goodwill.  The.
16 Views
View Answer
16) Petra Corporation paid $500,000 for 80% of the outstanding voting common stock of Sizable Corporation on January 2, 2011 when the book value of Sizable's net assets was $460,000. The fair values of Sizable's identifiable net assets were equal to their book values except as indicated below. BookFair ValueValue Inventories     (sold in.
6 Views
View Answer
3) Pancake Corporation saw the potential for vertical integration and purchases a 15% interest in Syrup Corp. on January 1, 2010, for $150,000.  At that date, Syrup's stockholders' equity included $200,000 of $10 par value common stock, $300,000 of additional paid in capital, and $500,000 retained earnings.  The companies began.
5 Views
View Answer
9) Pool Industries paid $540,000 to purchase 75% of the outstanding stock of Swimmin Corporation, on December 31, 2011. Any excess fair value over the identified assets and liabilities is attributed to goodwill.  The following year-end information was available just before the purchase: PoolSwimmin Swimmin BookBook Fair ValueValueValue Cash$756,000$80,000$80,000 Accounts Receivable260,000152,000152,000 Inventory480,000100,000120,000 Land440,000160,000140,000 Plant and equipment-net1,320,000400,000430,000 $3,256,000$892,000$922,000 Accounts Payable$880,000$22,000$22,000 Bonds.
7 Views
View Answer
7) On January 1, 2011, Pendal Corporation purchased 25% of the outstanding common stock of Sedda Corporation for $100,000 cash. Book value and fair value of Sedda's assets and liabilities at the time of acquisition are shown below. AssetsBookFair ValuesValues Cash$40,000$40,000 Accounts receivable100,00090,000 Inventories40,00050,000 Equipment   180,000  210,000  $360,000$390,000 Liabilities & Equities Accounts payable$110,000$110,000 Note payable50,00040,000 Capital stock100,000 Retained earnings 100,000          $360,000$150,000 Required: Prepare an.
8 Views
View Answer
Exercises 1) Parrot Corporation acquired 90% of Swallow Co. on January 1, 2011 for $27,000 cash when Swallow's stockholders' equity consisted of $10,000 of Capital Stock and $5,000 of Retained Earnings. The difference between the fair value and book value of Swallow's net assets was allocated solely to a patent amortized.
9 Views
View Answer
Use the following information to answer the question(s) below. On January 1, 2011, Pansy Company acquired a 10% interest in Sunflower Corporation for $80,000 when Sunflower's stockholders' equity consisted of $400,000 capital stock and $100,000 retained earnings. Book values of Sunflower's net assets equaled their fair values on this date. Sunflower's.
6 Views
View Answer
14) On January 2, 2011, Power Incorporated paid $630,000 for a 90% interest in Smallsen Company.  Smallsen's equity at that time amounted to $600,000, and their book values for assets and liabilities recorded approximated their fair values. Smallsen did not issue any additional stock in 2011.  At December 31, 2011,.
5 Views
View Answer
Multiple Choice Questions 1) What method must be used if FASB Statement No. 94 prohibits full consolidation of a 70% owned subsidiary? A) The cost method B) The Liquidation value C) Market value D) Equity method 2) From the standpoint of accounting theory, which of the following statements is the best justification for the preparation of.
24 Views
View Answer
13) On January 1, 2011, Paisley Incorporated paid $300,000 for 60% of Smarnia Company's outstanding capital stock. Smarnia reported common stock on that date of $250,000 and retained earnings of $100,000.  Plant assets, which had a five-year remaining life, were undervalued in Smarnia's financial records by $10,000. Smarnia also had.
33 Views
View Answer
7) Pawl Corporation acquired 90% of Snab Corporation on January 1, 2011 for $72,000 cash when Snab's stockholders' equity consisted of $30,000 of Capital Stock and $30,000 of Retained Earnings. The difference between the fair value of Pawl's assets and liabilities and the book value was allocated to a plant.
5 Views
View Answer
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.
15 Views
View Answer
8) Parakeet Company has the following information collected in order to prepare a cash flow statement and uses the direct method for Cash Flow from Operations. The annual report year end is December 31, 2011. Noncontrolling Interest Dividends Paid$20,000 Dividends Received from Equity Investees17,000 Cash Paid to Employees37,000 Cash Paid for Other Operating Activities34,000 Cash.
6 Views
View Answer
15) Shoreline Corporation had $3,000,000 of $10 par value common stock outstanding on January 1, 2009, and retained earnings of $1,000,000 on the same date. During 2009, 2010, and 2011, Shoreline earned net incomes of $400,000, $700,000, and $300,000, respectively, and paid dividends of $300,000, $550,000, and $100,000, respectively. On January.
6 Views
View Answer
12) Passcode Incorporated acquired 90% of Safe Systems International for $540,000, the market value at that time.  On the date of acquisition, Safe Systems showed the following balances on their ledger: Book ValueFair Value Current Assets$200,000$200,000 Buildings290,000320,000 Equipment410,000430,000 Liabilities(350,000)(360,000) Safe Systems has determined that their buildings have a remaining life of 10 years, and their equipment.
5 Views
View Answer
8) Patterson Company acquired 90% of Starr Corporation on January 1, 2011 for $2,250,000. Starr had net assets at that time with a fair value of $2,500,000. At the time of the acquisition, Patterson computed the annual excess fair-value amortization to be $20,000, based on the difference between Starr's net.
5 Views
View Answer

Welcome Back!

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Forgot?
Login
Don't have an account? Signup

Join ScholarOn

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Signup
By registering, I agree to the Terms and Privacy Policies
Already have an account? Log in

Verify Your Email

Check your inbox & click on the link to activate your account.

Resend Email
Verification Mail Send Successfully. Please Check Your Email.

Forgot Password

Please enter your registered email to recieve the password reset link.

Send reset link
Already have an account? Log in
Did you know?

ScholarOn has more than 2 Million+ answers, textbook solutions & flashcards. Explore Now!

d
Let us boost your grade together!

Get 24/7 homework help from Experts

Let our knowledge be your backup

1

Submit your homework question or assignment

2

Receive a quote & Make the Payment

3

Sit Back & Relax to Earn Better Grades!

Drag files here or Browse your Device

Maximum file size 10MB
17,475 Accounting Questions Answered! Get Answer

We are The Best Because

  • On Time Delivery
  • Plagiarism ReportFree
  • Unlimited RevisionsFree
  • 100% Privacy & Confidential
  • 24/7 Live Chat Support
4.9 (16191 Ratings)
You can communicate directly with your expert until the solution quality is delivered to your complete satisfaction.
Looking for writing help?
Did you know?

ScholarOn has more than 2 Million+ answers, textbook solutions & flashcards. Explore Now!