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Study Resources (Accounting)

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.
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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.
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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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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.
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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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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.
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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.
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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.
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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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9) PreBuild Manufacturing acquired 100% of Shoding Industries common stock on January 1, 2010, 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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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, 2010, Plower sold land that cost $25,000 to Squab for $40,000. Squab resold the land for $45,000.
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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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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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5) Pierce Manufacturing owns all of the outstanding voting common stock of Sylvia Company, as acquired several years ago when the book values and fair values of Sylvia's net assets were equal. In 2010, Pierce set out to re-structure the company, and in doing so, re-aligned the manufacturing processes to streamline.
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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.
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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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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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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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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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Use the following information to answer the question(s) below. Pouch Corporation acquired an 80% interest in Shenley Corporation on January 1, 2012, when the book values of Shenley's assets and liabilities were equal to their fair values. The cost of the 80% interest was equal to 80% of the book value.
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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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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.
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Use the following information to answer the question(s) below. On January 1, 2010, Shrimp Corporation purchased a delivery truck with an expected useful life of five years, and a salvage value of $8,000. On January 1, 2012, Shrimp sold the truck to Pacet Corporation. Pacet assumed the same salvage value and.
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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.
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15) Porter Corporation acquired 70% of the outstanding voting common stock of Sherman Inc. in 2004. On January 1, 2005, Sherman Inc. purchased a depreciable machine for $120,000 cash with an estimated useful life of 10 years that was depreciated on a straight-line basis. The machine has no estimated salvage.
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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.
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