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Study Resources (Accounting)

Multiple Choice Questions 1.If Push Company owned 51 percent of the outstanding common stock of Shove Company, which reporting method would be appropriate? A.Cost method B.Consolidation C.Equity method D.Merger method 2.Usually, an investment of 20 to 50 percent in another company's voting stock is reported under the: A.cost method B.equity method C.full consolidation method D.fair value method 3.From an investor's.
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31.On December 31, 20X8, Mercury Corporation acquired 100 percent ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $300,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $150,000. The book values and fair values of Saturn's assets and liabilities.
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46.Top Corporation acquired 80 percent of Bottom Corporation's common stock on January 1, 20X8, for $520,000. At that date, Bottom reported common stock outstanding of $250,000 and retained earnings of $375,000. Assume the fair value of the noncontrolling interest on January 1, 20X8 was $130,000. The book values and fair.
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Essay Questions 34.Consolidated financial statements are required by GAAP in certain circumstances. This information can be very useful to stockholders and creditors. Yet, there are limitations to these financial statements for which the users must be aware. What are at least three (3) limitations of consolidated financial statements? 35.In reading a.
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42.On January 1, 20X9, Zigma Company acquired 100 percent of Standard Company's common shares at underlying book value. Zigma uses the equity method in accounting for its ownership of Standard. On December 31, 20X9, the trial balances of the two companies are as follows:Required:1. Prepare the eliminating entries needed as.
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11.Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follow:At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a.
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Essay Questions 47.Dish Corporation acquired 100 percent of the common stock of Toll Company by issuing 10,000 shares of $10 par common stock with a market value of $60 per share. Summarized balance sheet data for the two companies immediately preceding the acquisition are as follows:Required: Determine the dollar amounts.
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Essay Questions 43.On December 31, 20X8, Defoe Corporation acquired 80 percent of Crusoe Company's common stock for $104,000 cash. The fair value of the noncontrolling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the.
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51.Silver Corporation acquired 100 percent of Bronze Company on January 1, 20X5, for $350,000. Following are selected account balances from Silver and Bronze Corporation as of December 31, 20X5:Additional Information:1. On January 1, 20X5 the fair market value of Bronze's assets equaled their book value with the exception of Plant.
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31.Pursuing an inorganic growth strategy, Wilson Company acquired Venus Company's net assets and assigned them to four separate reporting divisions. Wilson assigned total goodwill of $134,000 to the four reporting divisions as given below:Based on the preceding information, for Delta: A.no goodwill should be reported at year-end. B.goodwill impairment of $15,000 should.
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Essay Questions 40.A cash dividend returns assets to the stockholders while reducing corporate liquidity. Why are not all cash dividends considered to be "liquidating dividends"? In your response include a discussion of how an investor accounts for a liquidating dividend. 41.Dear Corporation acquired 100 percent of the voting shares of Therry.
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43.In the absence of other evidence, common stock ownership of between 20 and 50 percent is viewed as indicating that the investor is able to exercise significant influence over the investee. What are some of the other factors that could constitute evidence of the ability to exercise significant influence? 44.On January.
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Multiple Choice Questions 1.Bristle Corporation acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000. The fair value of the noncontrolling interest at that date was determined to be $100,000. Silver's balance sheet immediately before the combination reflected the following balances:A careful review of the fair.
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11.When a parent and its subsidiary use a periodic inventory system rather than a perpetual system, the income and asset balances reported in the consolidated financial statements are:I. affected only if there are upstream intercompany sales of inventory.II. affected only if there are downstream intercompany sales of inventory. A.I B.II C.Both I and.
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21.Note: This is a Kaplan CPA Review QuestionGrant, Inc. acquired 30 percent of South Co.'s voting stock for $200,000 on January 2, 20X4. Grant's 30 percent interest in South gave Grant the ability to exercise significant influence over South's operating and financial policies. During 20X4, South earned $80,000 and paid.
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Multiple Choice Questions 21.Which phase of the systems development life cycle would describe in detail the desired features of the system? A.Analysis phase B.Planning phase C.Design Phase D.Implementation Phase 22.The final phase of the systems development life cycle is the A.Analysis phase B.Maintenance phase C.Design Phase D.Implementation Phase 23.Which phase of the systems development life cycle includes transforming the plan.
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11.In order to reduce the risk associated with a new line of business, Conservative Corporation established Spin Company as a wholly owned subsidiary. It transferred assets and accounts payable to Spin in exchange for its common stock. Spin recorded the following entry when the transaction occurred:Based on the preceding information,.
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21.On January 1, 20X8, Chariot Company acquired 100 percent of Stryder Company for $220,000 cash. The trial balances for the two companies on December 31, 20X8, included the following amounts:On the acquisition date, Stryder reported net assets with a book value of $170,000. A total of $10,000 of the acquisition.
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11.Zeta Corporation and its subsidiary reported consolidated net income of $320,000 for the year ended December 31, 20X8. Zeta owns 80 percent of the common shares of its subsidiary, acquired at book value. Noncontrolling interest was assigned income of $30,000 in the consolidated income statement for 20X8. What is the.
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Multiple Choice Questions 1.Consolidated financial statements tend to be most useful for: A.Creditors of a consolidated subsidiary. B.Investors and long-term creditors of the parent company. C.Short-term creditors of the parent company. D.Stockholders of a consolidated subsidiary. 2.Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo. Company Esstwo.
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52.On December 31, 20X9, Thessaly Corporation acquired all of Ionian Company's common shares, for $570,000 cash. On that date, Ionian's balance sheet appeared as follows:The fair values of all of Ionian's assets and liabilities were equal to their book values except for the following:In recording this acquisition, push-down accounting was.
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50.Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X7, the balance sheets of the two companies showed the following amounts:Tenzing Corporation reported retained earnings of $75,000 at the date of acquisition. The difference between the acquisition price and underlying book.
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11.The breakdown of all of the project tasks needed for completion is often called the work breakdown structure. 12.Parallel or concurrent tasks are tasks that be done at the same time. 13.Tasks that must be completed in a specific sequence but don't require additional resources or a specific completion time are considered.
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11.On January 1, 20X9, Gulliver Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of.
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31.Parent Co. purchases 100 percent of Son Company on January 1, 20X1, when Parent's retained earnings balance is $520,000 and Son's is $150,000. During 20X1, Son reports $15,000 of net income and declares $6,000 of dividends. Parent reports $105,000 of separate operating earnings plus $15,000 of equity-method income from its.
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Essay Questions 40.Brainstorm a list of reasons why 68% (including 44% challenged + 24% failed) of the information technology projects either failed or were challenged in 2009. Consider specifics of each of the elements of the triple constraints model and any other common delays including the challenges of working with.
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49.Paco Company acquired 100 percent of the stock of Garland Corp. on December 31, 20X8. The stockholder's equity section of Garland's balance sheet at that date is as follows:Paco financed the acquisition by using $880,000 cash and giving a note payable for $400,000. Book value approximated fair value for all.
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Multiple Choice Questions 11.Which of the following is not a reason that large IT projects require economic justification? A.IT is a commodity, every firm makes IT investments B.IT investments require large amounts of capital C.Capital resources are limited D.Major IT projects can affect substantial portions of the organization 12.Which of the following is not a question.
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44.Magellan Corporation acquired 80 percent ownership of Dipper Corporation on January 1, 20X8, for $200,000. At that date, Dipper reported common stock outstanding of $75,000 and retained earnings of $150,000. The fair value of the noncontrolling interest was $50,000. The differential is assigned to equipment, which had a fair value.
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Essay Questions 45.On January 1, 20X8, Alaska Corporation acquired Mercantile Corporation's net assets by paying $160,000 cash. Balance sheet data for the two companies and fair value information for Mercantile Corporation immediately before the business combination are given below:Required:Prepare the journal entry to record the acquisition of Mercantile Corporation. 1-1 .
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Essay Questions 21.Explain why it is easier to assess the costs of an IT project than to assess the benefits. What factors complicate the cost estimates? What factors complicate the benefits estimates? Do the risks associated with the project primarily affect the costs or the benefits? Why? 22.Pacific Green Company is considering.
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31.Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7, at underlying book value. On that date, the fair value of noncontrolling interest was equal to 10 percent of the book value of Scrooge Corporation. Pilfer purchased inventory from Scrooge for $90,000 on August 20, 20X8, and resold 70.
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21.When a parent owns less than 100% of a subsidiary, the noncontrolling interest shareholders are allocated their ownership percentage of income or net assets in all of the following eliminating entries except for: A.The basic investment account elimination entry B.The excess value (differential) reclassification entry C.The optional accumulated depreciation elimination entry D.The amortized excess.
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21.Push Company owns 60% of Shove Company's outstanding common stock. Intra-entity sales are as follows:Assume Push sold the inventory to Shove. Using the fully adjusted equity method, what journal entry would be recorded by Push to defer the unrealized gross profit on inventory sales to Shove in 20X1? A.Option A B.Option B C.Option.
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Multiple Choice Questions 1.When there are intercompany sales of inventory during the year and a three-part consolidation worksheet is prepared, elimination entries related to the intercompany sales:I. Always are needed.II. Are not needed if the entire inventory is resold to unrelated parties prior to the end of the year. A.I B.II C.Both I and.
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36.Parent Company acquired 90% of Son Inc. on January 31, 20X2 in exchange for cash. The book value of Son's individual assets and liabilities approximated their acquisition-date fair values. On the date of acquisition, Son reported the following:During the year Son Inc. reported $310,000 in net income and declared $15,000.
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24.Pacific Green Company is considering buying a unique bar-coding machine to help them track their plant inventory. They evaluated the payback period and accounting rate of return and selected the project for further evaluation. Relevant information on the machine is repeated as follows:Acquisition cost = $48,000Expected salvage value = $0Expected.
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41.Consolidated financial statements are being prepared for Behemoth Corporation and its two wholly-owned subsidiaries that have intercompany loans of $50,000 and intercompany profits of $100,000. How much of these intercompany loans and profits should be eliminated? A.intercompany loans - $0; intercompany profits - $0 B.intercompany loans - $50,000; intercompany profits - $0 C.intercompany.
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Multiple Choice Questions 1.Assuming no impairment in value prior to transfer, assets transferred by a parent company to another entity it has created should be recorded by the newly created entity at the assets': A.cost to the parent company. B.book value on the parent company's books at the date of transfer. C.fair value.
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21.All of the following statements accurately describe Special Purpose Entities (SPEs) except for: A.SPEs are corporations, trust or partnerships created for a single specified purpose. B.SPEs usually have no substantive operations and are used for financing operations. C.SPEs are used for asset securitization, risk sharing and taking advantage of tax statues. D.A variable interest.
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Multiple Choice Questions 1.On July 1, 20X9, Link Corporation paid $340,000 for all of Tinsel Company's outstanding common stock. On that date, the costs and fair values of Tinsel's recorded assets and liabilities were as follows:Based on the preceding information, the differential reflected in a consolidation worksheet to prepare a.
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