Info
Warning
Danger

Study Resources (Accounting)

112.The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2012, follow. Lakely's buildings were undervalued on its financial records by $60,000.On December 31, 2012, Jode issued 54,000 new shares of its $10 par value stock in exchange for all.
4 Views
View Answer
109.Salem Co. had the following account balances as of December 1, 2012:Bellington Inc. transferred $1.7 million in cash and 12,000 shares of its newly issued $30 par value common stock (valued at $90 per share) to acquire all of Salem's outstanding common stock.Determine the balance for Goodwill that would be.
26 Views
View Answer
71.Presented below are the financial balances for the Atwood Company and the Franz Company as of December 31, 2012, immediately before Atwood acquired Franz. Also included are the fair values for Franz Company's net assets at that date. Note: Parenthesis indicate a credit balance Assume a business combination took place at December.
4 Views
View Answer
31.When a company applies the partial equity method in accounting for its investment in a subsidiary and the subsidiary's equipment has a fair value greater than its book value, what consolidation worksheet entry is made in a year subsequent to the initial acquisition of the subsidiary? A. A above B. B above C..
4 Views
View Answer
Multiple Choice Questions 1.Which one of the following accounts would not appear in the consolidated financial statements at the end of the first fiscal period of the combination? A. Goodwill. B. Equipment. C. Investment in Subsidiary. D. Common Stock. E. Additional Paid-In Capital. 2.Which of the following internal record-keeping methods can a parent choose to account.
16 Views
View Answer
101.How are direct combination costs, contingent consideration, and a bargain purchase reflected in recording an acquisition transaction? 102.How is contingent consideration accounted for in an acquisition business combination transaction? 103.How are bargain purchases accounted for in an acquisition business transaction? A bargain purchase results when the collective fair values of the net identified.
5 Views
View Answer
51.On January 4, 2012, Harley, Inc. acquired 40% of the outstanding common stock of Bike Co. for $2,400,000. This investment gave Harley the ability to exercise significant influence over Bike. Bike's assets on that date were recorded at $10,500,000 with liabilities of $4,500,000. There were no other differences between book.
5 Views
View Answer
11.Which one of the following is a characteristic of a business combination accounted for as an acquisition? A. The combination must involve the exchange of equity securities only. B. The transaction establishes an acquisition fair value basis for the company being acquired. C. The two companies may be about the same size,.
8 Views
View Answer
104.Describe the accounting for direct costs, indirect costs, and issuance costs under the acquisition method of accounting for a business combination. 105.What is the difference in consolidated results between a business combination whereby the acquired company is dissolved, and a business combination whereby separate incorporation is maintained? .
6 Views
View Answer
118.Steven Company owns 40% of the outstanding voting common stock of Nicole Corp. and has the ability to significantly influence the investee's operations. On January 3, 2013, the balance in the Investment in NicoleCorp. account was $503,000. Amortization associated with this acquisition is $12,000 per year. During 2013, Nicole earned.
8 Views
View Answer
115.The following are preliminary financial statements for Black Co. and Blue Co. for the year ending December 31, 2013.On December 31, 2013 (subsequent to the preceding statements), Black exchanged 10,000 shares of its $10 par value common stock for all of the outstanding shares of Blue. Black's stock on that.
5 Views
View Answer
31.Which statement is true concerning unrealized profits in intra-entity inventory transfers when an investor uses the equity method? A. The investor and investee make reciprocal entries to defer and realize inventory profits. B. The same adjustments are made for upstream and downstream transfers. C. Different adjustments are made for upstream and downstream.
8 Views
View Answer
113.The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2012, follow. Lakely's buildings were undervalued on its financial records by $60,000.On December 31, 2012, Jode issued 54,000 new shares of its $10 par value stock in exchange for all.
4 Views
View Answer
Multiple Choice Questions 1.At the date of an acquisition which is not a bargain purchase, the acquisition method A. consolidates the subsidiary's assets at fair value and the liabilities at book value. B. consolidates all subsidiary assets and liabilities at book value. C. consolidates all subsidiary assets and liabilities at fair value. D. consolidates.
14 Views
View Answer
111.On January 1, 2013, Spark Corp. acquired a 40% interest in Cranston Inc. for $250,000. On that date, Cranston's balance sheet disclosed net assets of $430,000. During 2013, Cranston reported net income of $100,000 and paid cash dividends of $30,000. Spark sold inventory costing $40,000 to Cranston during 2013 for.
7 Views
View Answer
31.The financial statements for Goodwin, Inc. and Corr Company for the year ended December 31, 2013, prior to Goodwin's acquisition business combination transaction regarding Corr, follow (in thousands): On December 31, 2013, Goodwin issued $600 in debt and 30 shares of its $10 par value common stock to the owners of.
4 Views
View Answer
11.On January 1, 2012, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts on January 1, 2012: Kaltop earned net income for 2012 of $126,000.
6 Views
View Answer
110.Salem Co. had the following account balances as of December 1, 2012:Bellington Inc. transferred $1.7 million in cash and 12,000 shares of its newly issued $30 par value common stock (valued at $90 per share) to acquire all of Salem's outstanding common stock.Assume that Bellington paid cash of $2.8 million..
5 Views
View Answer
41.The financial statements for Goodwin, Inc. and Corr Company for the year ended December 31, 2013, prior to Goodwin's acquisition business combination transaction regarding Corr, follow (in thousands): On December 31, 2013, Goodwin issued $600 in debt and 30 shares of its $10 par value common stock to the owners of.
5 Views
View Answer
61.The financial balances for the Atwood Company and the Franz Company as of December 31, 2013, are presented below. Also included are the fair values for Franz Company's net assets. Note: Parenthesis indicate a credit balance Assume an acquisition business combination took place at December 31, 2013. Atwood issued 50 shares of.
4 Views
View Answer
121.Steven Company owns 40% of the outstanding voting common stock of Nicole Corp. and has the ability to significantly influence the investee's operations. On January 3, 2013, the balance in the Investment in NicoleCorp. account was $503,000. Amortization associated with this acquisition is $12,000 per year. During 2013, Nicole earned.
9 Views
View Answer
113.Jager Inc. holds 30% of the outstanding voting shares of Kinson Co. and appropriately applies the equity method of accounting. Amortization associated with this investment equals $11,000 per year. For 2013, Kinson reported earnings of $100,000 and paid cash dividends of $40,000. During 2013, Kinson acquired inventory for $62,400, which.
6 Views
View Answer
119.Steven Company owns 40% of the outstanding voting common stock of Nicole Corp. and has the ability to significantly influence the investee's operations. On January 3, 2013, the balance in the Investment in NicoleCorp. account was $503,000. Amortization associated with this acquisition is $12,000 per year. During 2013, Nicole earned.
8 Views
View Answer
Essay Questions 91.For each of the following numbered situations below, select the best letter answer concerning accounting for investments:(A.) Increase the investment account.(B.) Decrease the investment account.(C.) Increase dividend revenue.(D.) No adjustment necessary.(1.) Income reported by 40% owned investee.(2.) Income reported by 10% owned investee.(3.) Loss reported by 40% owned investee.(4.).
5 Views
View Answer
120.Steven Company owns 40% of the outstanding voting common stock of Nicole Corp. and has the ability to significantly influence the investee's operations. On January 3, 2013, the balance in the Investment in NicoleCorp. account was $503,000. Amortization associated with this acquisition is $12,000 per year. During 2013, Nicole earned.
8 Views
View Answer
108.Jernigan Corp. had the following account balances at 12/1/12:Several of Jernigan's accounts have fair values that differ from book value. The fair values are: Land — $480,000; Building — $720,000; Inventory — $336,000; and Liabilities — $396,000.Inglewood Inc. acquired all of the outstanding common shares of Jernigan by issuing 20,000.
4 Views
View Answer
116.The following are preliminary financial statements for Black Co. and Blue Co. for the year ending December 31, 2013 prior to Black's acquisition of Blue.On December 31, 2013 (subsequent to the preceding statements), Black exchanged 10,000 shares of its $10 par value common stock for all of the outstanding shares.
5 Views
View Answer
99.For acquisition accounting, why are assets and liabilities of the subsidiary consolidated at fair value? 100.Goodwill is often acquired as part of a business combination. Why, when separate incorporation is maintained, does Goodwill not appear on the Parent company's trial balance as a separate account? .
5 Views
View Answer
101.How should an investor account for, and report, an investee's extraordinary income or loss?102.When should an investor not use the equity method for an investment of 21% in another corporation? 103.What is the primary objective of the fair value method of accounting for an investment?104.How would a change be made from.
5 Views
View Answer
Essay Questions92.What term is used to refer to a business combination in which only one of the original companies continues to exist? 93.How are stock issuance costs accounted for in an acquisition business combination? 94.What is the primary difference between recording an acquisition when the subsidiary is dissolved and when separate incorporation.
5 Views
View Answer
97.How would you account for in-process research and development acquired in a business combination accounted for as an acquisition? 98.Elon Corp. obtained all of the common stock of Finley Co., paying slightly less than the fair value of Finley's net assets acquired. How should the difference between the consideration transferred and.
5 Views
View Answer
114.The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2012, follow. Lakely's buildings were undervalued on its financial records by $60,000.On December 31, 2012, Jode issued 54,000 new shares of its $10 par value stock in exchange for all.
4 Views
View Answer
21.Prior to being united in a business combination, Botkins Inc. and Volkerson Corp. had the following stockholders' equity figures: Botkins issued 56,000 new shares of its common stock valued at $3.25 per share for all of the outstanding stock of Volkerson. Assume that Botkins acquired Volkerson on January 1, 2012. Immediately afterwards,.
5 Views
View Answer
117.For each of the following situations, select the best letter answer to reflect the effect of the numbered item on the acquirer's accounting entry at the date of combination when separate incorporation will be maintained. Items (4) and (6) require two selections.(A) Increase Investment account.(B) Decrease Investment account.(C) Increase Liabilities.(D).
9 Views
View Answer
Short Answer Questions106.Charlie Co. owns 30% of the voting common stock of Turf Services Inc. Charlie uses the equity method to account for its investment. On January 1, 2013, the balance in the investment account was $624,000. During 2013, Turf Services reported net income of $120,000 and paid dividends of.
6 Views
View Answer
41.Clancy Incorporated, sold $210,000 of its inventory to Reid Company during 2013 for $350,000. Reid sold $224,000 of this merchandise in 2013 with the remainder to be disposed of during 2014. Assume Clancy owns 30% of Reid and applies the equity method. What journal entry will be recorded at the end.
5 Views
View Answer
117.Pursley, Inc. acquires 10% of Ritz Corporation on January 3, 2012, for $80,000 when the book value of Ritz was $800,000. During 2012 Ritz reported net income of $125,000 and paid dividends of $30,000. On January 1, 2013, Pursley purchased an additional 20% of Ritz for $325,000, giving Pursley the.
15 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 (16695 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!