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Study Resources (Accounting)

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.
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35) Describe the major differences in characteristics that exist when comparing a large government agency to a large public company. 36) Clearly distinguish between a government business organization and a non-business government organization. 37) The Public Sector Accounting Board suggested several objectives for the financial statements of federal, provincial, and territorial governments..
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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.
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1) Who is the largest issuer of debt? A) Banks B) Government C) Publicly accountable enterprises D) Private enterprises 2) Which of the following is not a typical characteristic of a non-business organization? A) No equity investors B) May have restrictive funds C) Relies on the sale of goods and services D) Provision of collective goods and services 3) One.
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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,.
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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: .
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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.
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11) Which of the following is not a suggested objective for financial statements for public sector entities? A) To provide an accounting of financial affairs and resources B) To enable evaluation of compliance with legislation C) To provide information on financing and investing activities D) To determine if programs are economical, efficient, and effective 12).
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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.
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39) Contributions received by NFPs may be restricted. Funds can be received in the form of endowment contributions and contributions that are externally restricted by the donor or internally restricted by the board. Required: Explain the differences between endowment contributions and contributions that are externally restricted by the donor or internally restricted.
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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.
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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.
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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.
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14) On December 31, 2010, Peris Company acquired Shanta Company's outstanding stock by paying $400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price was $32 per share. Peris paid legal and accounting fees amounting to $35,000 in addition to stock issuance.
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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.
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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.
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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.
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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.
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Multiple Choice Questions 1) What method of accounting will generally be used when one company purchases less than 20% of the outstanding stock of another company? A) Only the fair value method may be used. B) Only the equity method may be used. C) Either the fair value method or the equity method may.
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41) PSAB defines a government organization as one that is "controlled by the government". Explain what is meant by "control" and how this is assessed for governments. Explain how controlled entities are reported. 42) One of the largest sources of revenue for governments is government transfers. Government transfers represent non-exchange revenue..
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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.
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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.
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38) Research surveys have suggested that there are several qualitative characteristics that are desirable in published financial reports of governmental units. Explain why comparability is so important to users and what this means for users. 39) According to PSAB, when and how is revenue measured in government entities? Explain how transfers.
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6) Bigga Corporation purchased the net assets of Petit, Inc. on January 2, 2011 for $380,000 cash and also paid $15,000 in direct acquisition costs. Petit, Inc. was dissolved on the date of the acquisition. Petit's balance sheet on January 2, 2011 was as follows: Accounts receivable-net$90,000Current liabilities$75,000 Inventory 220,000 Long term.
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Exercises 1) Parrot Incorporated purchased the assets and liabilities of Sparrow Company at the close of business on December 31, 2011. Parrot borrowed $2,000,000 to complete this transaction, in addition to the $640,000 cash that they paid directly. The fair value and book value of Sparrow's recorded assets and liabilities as.
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Use the following information to answer the question(s) below. Polka Corporation exchanges 100,000 shares of newly issued $1 par value common stock with a fair market value of $20 per share for all of the outstanding $5 par value common stock of Spot Inc. and Spot is then dissolved. Polka paid.
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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.
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3) At December 31, 2011, Pandora Incorporated issued 40,000 shares of its $20 par common stock for all the outstanding shares of the Sophocles Company. In addition, Pandora agreed to pay the owners of Sophocles an additional $200,000 if a specific contract achieved the profit levels that were targeted by.
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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.
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8) On January 2, 2011, Pilates Inc. paid $900,000 for all of the outstanding common stock of Spinning Company, and dissolved Spinning Company. The carrying values for Spinning Company's assets and liabilities are recorded below. Cash$200,000 Accounts Receivable220,000 Copyrights (purchased)400,000 Goodwill120,000 Liabilities(180,000) Net assets$760,000 On January 2, 2011, Spinning anticipated collecting $185,000 of the recorded Accounts Receivable..
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Multiple Choice Questions 1) Which of the following is not a reason for a company to expand through a combination, rather than by building new facilities? A) A combination might provide cost advantages. B) A combination might provide fewer operating delays. C) A combination might provide easier access to intangible assets. D) A combination might.
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43) Describe the four fundamental ways in which not-for-profit organizations differ from business enterprises. What are the reporting objectives of NFPs? 44) World Doctors (WD) is a not-for-profit organization that provides medical expertise and equipment in areas of the world that cannot afford this type of service or have been struck.
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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.
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