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Study Resources (Accounting)

8.1   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'.
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7.2   Exercises 1) Separate company and consolidated income statements for Pitta and Sojourn Corporations for the year ended December 31, 2013 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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19) Plock Corporation, the 75% owner of Seraphim Company, reported net income of $400,000 in 2013, prior to recording any income from Seraphim. Seraphim reported net income for that same year of $80,000 on their stand-alone statements. During 2013, an intercompany sale of a vehicle resulted in a gain of.
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3) Pollek Corporation paid $16,200 for a 90% interest in Swamp Corporation on January 1, 2013, 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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8) Separate income statements of Pingair Corporation and its 90%-owned subsidiary, Staunch Inc., for 2014 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.
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11) If SOS sold the additional shares directly to Great, Great's Investment in SOS account after the sale would be A) $1,350,000. B) $1,395,000. C) $1,425,000. D) $1,500,000. 12) Consider a sale of stock by a subsidiary to parties outside the consolidated entity. This transaction requires an adjustment of the parent's investment and additional paid-in.
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13) Separate income statements of Plantation Corporation and its 90%-owned subsidiary, Savannah Corporation, for 2014 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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5.1   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).
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12) Paulee Corporation paid $24,800 for an 80% interest in Sergio Corporation on January 1, 2013, 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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11) What is Pouch's income from Shenley for 2014? 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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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, 2007. Additional information: 1.Pheasant sold inventory items that cost $3,000 to Sal during 2014 for $6,000. One-half of this merchandise was inventoried by Sal at year-end. At December.
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19) Pare Corporation owns 65% of the outstanding voting stock of Summer Corporation. On January 1, 2013, 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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b.1   Multiple Choice Questions Use the following information to answer the question(s) below. In 2014, 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.
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4) Plower Corporation acquired all of the outstanding voting common stock of the Squab Corporation several years ago when the book values and fair values of Squab's net assets were equal. On April 1, 2012, Plower sold land that cost $25,000 to Squab for $40,000. Squab resold the land for $45,000.
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5.2   Exercises 1) Penguin Corporation acquired a 60% interest in Squid Corporation on January 1, 2014, 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.
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11) Parrot Company owns all the outstanding voting stock of Southern Manufacturing.  On January 1, 2014, 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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6.2   Exercises 1) Pigeon Company owns 80% of the outstanding stock of Spiniflex Corporation, which was purchased on January 1, 2008, when Spiniflex's book values were equal to its fair values. The amount paid by Pigeon included $16,000 for goodwill. On January 1, 2009, Pigeon purchased a truck for $40,000 which had.
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9) PreBuild Manufacturing acquired 100% of Shoding Industries common stock on January 1, 2014, for $670,000 when the book values of Shoding's assets and liabilities were equal to their fair values and Shoding's stockholders' equity consisted of $380,000 of Capital Stock and $290,000 of Retained Earnings. PreBuild's separate income (excluding investment.
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6) Snow Company is a wholly owned subsidiary of Penguin Corporation.  On January 1, 2011, 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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16) On January 1, 2014, 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 2014, Palling and Sam's had unrealized inventory profits.
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7) Paula's Pizzas purchased 80% of their supplier, Sarah's Sauces.  Sarah's book values equaled fair value at the time of the acquisition.  Paula sold Sarah some packaging equipment on January 2, 2013 for $100,000.  The equipment had a carrying value of $90,000, and original cost of $120,000, and had a.
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