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61.Which of the following characteristics is not indicative of an enterprise qualifying as a primary beneficiary with a controlling financial interest in a variable interest entity? A. The power to direct the most significant economic performance activities. B. The power through voting or similar rights to direct activities which significantly impact.
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93.When a company has preferred stock in its capital structure, what amount should be used to calculate non-controlling interest in the preferred stock of the subsidiary when the company is acquired as a subsidiary of another company? 94.Parent Corporation acquired some of its subsidiary's outstanding bonds. Why might Parent purchase.
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125.On January 1, 2013, Musial Corp. sold equipment to Matin Inc. (a wholly-owned subsidiary) for $168,000 in cash. The equipment originally cost $140,000 but had a book value of only $98,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the straight-line.
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89.How are intra-entity inventory transfers treated on the consolidation worksheet and how are they reflected in a consolidated statement of cash flows? 90.Danbers Co. owned seventy-five percent of the common stock of Renz Corp. How does the issuance of a five percent stock dividend by Renz affect Danbers and the.
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61.How is goodwill amortized? A. It is not amortized for reporting purposes or for tax purposes. B. It is not amortized for reporting purposes, but is amortized over a 5-year life for tax purposes. C. It is not amortized for tax purposes, but is amortized over a 5-year life for reporting purposes. D..
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114.Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At the present time, Glotfelty is reporting the following stockholders' equity: Glotfelty issues 5,000 shares of previously unissued stock to the public for $27 per share. None of this stock is purchased by Panton. Prepare Panton's journal entry to recognize the.
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127.On January 1, 2013, Musial Corp. sold equipment to Matin Inc. (a wholly-owned subsidiary) for $168,000 in cash. The equipment originally cost $140,000 but had a book value of only $98,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the straight-line.
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71.Delta Corporation owns 90 percent of Sigma Company, and Sigma owns 90 percent of Pi, Inc. all of which are domestic corporations. Information for the three companies for the year ending December 31, 2013 follows: What is Sigma's accrual-based income for 2013? A. $400,000. B. $592,000. C. $540,000. D. $572,800. E. $600,000. 72.Delta Corporation owns 90.
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96.Parent Corporation recently acquired some of its subsidiary's outstanding bonds, at an amount which required the recognition of a loss. In what ways could the loss be allocated? Which allocation would you recommend? Why? 97.How does the existence of a non-controlling interest affect the preparation of a consolidated statement of.
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11.Rojas Co. owned 7,000 shares (70%) of the outstanding 10%, $100 par preferred stock and 60% of the outstanding common stock of Brett Co. When Brett reported net income of $780,000, what was the non-controlling interest in the subsidiary's income? A. $234,000. B. $273,000. C. $302,000. D. $312,000. E. $284,000. 12.Knight Co. owned 80% of.
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51.Under current U.S. tax law for consolidated tax returns: A. One entity in the group can use another entity's net operating loss carry-forward to its advantage. B. The parent can use the net operating loss carry-forward of another entity in the group. C. A net operating loss carry-forward if an entity will.
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Short Answer Questions 98.On January 1, 2013, Bast Co. had a net book value of $2,100,000 as follows: 99.Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation.
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Essay Questions 85.Parent Corporation loaned money to its subsidiary with a five-year note at the market interest rate. How would the note be accounted for in the consolidation process? 86.What documents or other sources of information would be used to prepare a consolidated statement of cash flows? .
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31.A subsidiary issues new shares of common stock. If the parent acquires all of these shares at an amount greater than book value, which of the following statements is true? A. The investment in subsidiary will decrease. B. Additional paid-in capital will decrease. C. Retained earnings will increase. D. The investment in subsidiary.
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Multiple Choice Questions 1.On January 1, 2013, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying value of $421,620, and Riley paid $401,937 for them. How should you account for the difference between the carrying value and the purchase price in.
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111.Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At the present time, Glotfelty is reporting the following stockholders' equity: Glotfelty issues 5,000 shares of previously unissued stock to the public for $40 per share. None of this stock is purchased by Panton. Describe how this transaction would affect Panton's.
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41.On January 1, 2012, Jones Company bought 15% of Whitton Company. Jones paid $150,000 for these shares, an amount that exactly equaled the proportionate book value of Whitton. On January 1, 2013, Whitton acquired 80% ownership of Jones. The following data are available concerning Whitton's acquisition of Jones: Excess fair value.
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31.Which of the following statements is true regarding the filing of income taxes for an affiliated group? A. Domestic subsidiaries greater than 50% ownership must file a consolidated tax return. B. Domestic subsidiaries greater than 60% ownership must file a consolidated tax return. C. Domestic subsidiaries greater than 80% ownership must file.
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81.Franklin Corporation owns 90 percent of the outstanding voting stock of Georgia Company. On January 2, 2011, Georgia sold 7 percent bonds payable with a $5,000,000 face value maturing January 2, 2031 at a premium of $500,000. On January 1, 2013, Franklin acquired 20 percent of these same bonds on.
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71.Anderson, Inc. has owned 70% of its subsidiary, Arthur Corp., for several years. The consolidated balance sheets of Anderson, Inc. and Arthur Corp. are presented below: Additional information for 2013: Net cash flow from operating activities was: A. $43,000. B. $44,800. C. $46,200. D. $50,000. E. $25,000. 72.Anderson, Inc. has owned 70% of its subsidiary, Arthur Corp.,.
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91.During 2013, Parent Corporation purchased at book value some of the outstanding bonds of its subsidiary. How would this acquisition have been reflected in the consolidated statement of cash flows? 92.On January 1, 2013, Parent Corporation acquired a controlling interest in the voting common stock of Foxboro Co. At the.
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87.Parent Corporation acquired some of its subsidiary's bonds on the open bond market. The remaining life of the bonds was eight years, and Parent expected to hold the bonds for the full eight years. How would the acquisition of the bonds affect the consolidation process? 88.Parent Corporation acquired some of.
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126.On January 1, 2013, Musial Corp. sold equipment to Matin Inc. (a wholly-owned subsidiary) for $168,000 in cash. The equipment originally cost $140,000 but had a book value of only $98,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the straight-line.
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113.Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At the present time, Glotfelty is reporting the following stockholders' equity: Glotfelty issues 5,000 shares of previously unissued stock to the public for $27 per share. None of this stock is purchased by Panton. Describe how this transaction would affect Panton's.
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21.Beagle Co. owned 80% of Maroon Corp. Maroon owned 90% of Eckston Inc. Operating income totals for 2013 are shown below; these figures contained no investment income. Amortization expense was not required by any of these acquisitions. Included in Eckston's operating income was a $56,000 unrealized gain on intra-entity transfers.
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41.The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary, Stage Company. A. $20,000 added to net income as an operating activity. B. $20,000 deducted from net income as an operating activity. C. $15,000 deducted from net income as an operating activity. D. $5,000 added to.
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21.These questions are based on the following information and should be viewed as independent situations. Popper Co. acquired 80% of the common stock of Cocker Co. on January 1, 2011, when Cocker had the following stockholders' equity accounts. A. $0. B. decrease it by $23,240. C. decrease it by $68,250. D. decrease it by $45,060. E..
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112.Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago. At the present time, Glotfelty is reporting the following stockholders' equity: Glotfelty issues 5,000 shares of previously unissued stock to the public for $40 per share. None of this stock is purchased by Panton. Prepare Panton's journal entry to recognize the.
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Multiple Choice Questions 1.Buckette Co. owned 60% of Shuvelle Corp. and 40% of Tayle Corp., and Shuvelle owned 35% of Tayle. When Buckette prepared consolidated financial statements, it should include A. Shuvelle but not Tayle. B. Tayle but not Shuvelle. C. either Shuvelle or Tayle. D. Shuvelle and Tayle. E. neither Shuvelle nor Tayle. 2.Buckette Co..
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