Question 1

What was consolidated equipment as of December 31, 2018?

Accepted Answer

The answer of What was consolidated equipment as of December...

Question 2

What is the basic objective of all consolidations?

Accepted Answer

The basic objective of all consolidation

Question 3

Determine the amortization expense related to the consolidation at the year-end date of 12/31/24.

Accepted Answer

By 2024, all of the fair value

Question 4

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?

Accepted Answer

A)  Goodwill. 
B)  Equipment. 
C)  Investment in Subsidiary. 
D)  Common Stock. 
E)  Additional Paid-In Capital. 
A)  Goodwill. 
B)  Equipment. 
C)  Investment in Subsidiary. 
D)  Common Stock. 
E)  Additional Paid-In Capital.

Question 5

How is the fair value allocation of an intangible asset allocated to expense when the asset has no legal, regulatory, contractual, competitive, economic, or other factors that limit its life?

Accepted Answer

A)  Equally over 20 years. 
B)  Equally over 40 years. 
C)  Equally over 20 years with an annual impairment review. 
D)  No amortization, but annually reviewed for impairment and adjusted accordingly. 
E)  No amortization over an indefinite period time. 
A)  Equally over 20 years. 
B)  Equally over 40 years. 
C)  Equally over 20 years with an annual impairment review. 
D)  No amortization, but annually reviewed for impairment and adjusted accordingly. 
E)  No amortization over an indefinite period time.

Question 6

At the end of 2017, the consolidation entry to eliminate Cale's accrual of Kaltop's earnings would include a credit to Investment in Kaltop Co.for

Accepted Answer

A)  $124,400. 
B)  $126,000. 
C)  $127,000. 
D)  $ 76,400. 
E)  $ 0. 
A)  $124,400. 
B)  $126,000. 
C)  $127,000. 
D)  $ 76,400. 
E)  $ 0.

Question 7

If Watkins pays $450,000 in cash for Glen, what acquisition-date fair value allocation, net of amortization, should be attributed to the subsidiary's Equipment in consolidation at December 31, 2019?

Accepted Answer

A)  ($5,000). 
B)  $80,000. 
C)  $75,000. 
D)  $73,500. 
E)  ($3,500). 
A)  ($5,000). 
B)  $80,000. 
C)  $75,000. 
D)  $73,500. 
E)  ($3,500).

Question 8

Hanson Co.acquired all of the common stock of Roberts Inc.on January 1, 2017, transferring consideration in an amount slightly more than the fair value of Roberts' net assets.At that time, Roberts had buildings with a twenty-year useful life, a book value of $600,000, and a fair value of $696,000.On December 31, 2018, Roberts had buildings with a book value of $570,000 and a fair value of $648,000.On that date, Hanson had buildings with a book value of $1,878,000 and a fair value of $2,160,000.
Required:
What amount should be shown for buildings on the consolidated balance sheet dated December 31, 2018?

Accepted Answer

The answer of Hanson Co.acquired all of the common stock...

Question 9

Private companies, with respect to goodwill:

Accepted Answer

A)  May elect to amortize it over a period of 15 years. 
B)  Must treat it as an intangible asset with an indefinite life. 
C)  Must amortize it over a 12-year period. 
D)  May amortize goodwill if the value of the company does not exceed $10 million. 
E)  May treat goodwill as a definite lived intangible asset with a 10-year useful life. 
A)  May elect to amortize it over a period of 15 years. 
B)  Must treat it as an intangible asset with an indefinite life. 
C)  Must amortize it over a 12-year period. 
D)  May amortize goodwill if the value of the company does not exceed $10 million. 
E)  May treat goodwill as a definite lived intangible asset with a 10-year useful life.

Question 10

According to GAAP regarding amortization of goodwill, which of the following statements is true?

Accepted Answer

A)  Goodwill recognized in consolidation must be amortized over 20 years. 
B)  Goodwill recognized in consolidation must be expensed in the period of acquisition. 
C)  Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment. 
D)  Goodwill recognized in consolidation can never be written off. 
E)  Goodwill recognized in consolidation must be amortized over 40 years. 
A)  Goodwill recognized in consolidation must be amortized over 20 years. 
B)  Goodwill recognized in consolidation must be expensed in the period of acquisition. 
C)  Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment. 
D)  Goodwill recognized in consolidation can never be written off. 
E)  Goodwill recognized in consolidation must be amortized over 40 years.

Question 11

What was consolidated net income for the year ended December 31, 2018?

Accepted Answer

The answer of What was consolidated net income for the...

Question 12

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?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 13

Parrett Corp.acquired one hundred percent of Jones Inc.on January 1, 2016, at a price in excess of the subsidiary's fair value.On that date, Parrett's equipment (ten-year life) had a book value of $360,000 but a fair value of $480,000.Jones had equipment (ten-year life) with a book value of $240,000 and a fair value of $350,000.Parrett used the partial equity method to record its investment in Jones.On December 31, 2018, Parrett had equipment with a book value of $250,000 and a fair value of $400,000.Jones had equipment with a book value of $170,000 and a fair value of $320,000.What is the consolidated balance for the Equipment account as of December 31, 2018?

Accepted Answer

A)  $387,000. 
B)  $497,000. 
C)  $508.000. 
D)  $537,000. 
E)  $570,000. 
A)  $387,000. 
B)  $497,000. 
C)  $508.000. 
D)  $537,000. 
E)  $570,000.

Question 14

If the partial equity method had been applied, what was 2018 consolidated net income?

Accepted Answer

A)  $840,000. 
B)  $768,400. 
C)  $822,000. 
D)  $240,000. 
E)  $600,000. 
A)  $840,000. 
B)  $768,400. 
C)  $822,000. 
D)  $240,000. 
E)  $600,000.

Question 15

From which methods can a parent choose for its internal recordkeeping related to the operations of a subsidiary?

Accepted Answer

The parent can choose from amo

Question 16

For an acquisition when the subsidiary maintains its incorporation, under the partial equity method, what adjustments are made to the balance of the investment account?

Accepted Answer

The balance of the investment account is

Question 17

Compare the differences in accounting treatment for goodwill between U.S.GAAP and IFRS.

Accepted Answer

Both U.S. GAAP and IFRS require goodwill

Question 18

Assuming Rhine generates cash flow from operations of $27,200 in 2017, how will Harrison record the $16,500 payment of cash on April 15, 2018 in satisfaction of its contingent obligation?

Accepted Answer

A)  Debit Contingent performance obligation $16,500, and Credit Cash $16,500. 
B)  Debit Contingent performance obligation $3,142, debit Loss from revaluation of contingent performance obligation $13,358, and Credit Cash $16,500. 
C)  Debit Investment in Subsidiary and Credit Cash, $16,500. 
D)  Debit Goodwill and Credit Cash, $16,500. 
E)  No entry. 
A)  Debit Contingent performance obligation $16,500, and Credit Cash $16,500. 
B)  Debit Contingent performance obligation $3,142, debit Loss from revaluation of contingent performance obligation $13,358, and Credit Cash $16,500. 
C)  Debit Investment in Subsidiary and Credit Cash, $16,500. 
D)  Debit Goodwill and Credit Cash, $16,500. 
E)  No entry.

Question 19

Determine the amortization expense related to the combination at the year-end date of 12/31/16.

Accepted Answer

The answer of Determine the amortization expense related to the...

Question 20

Under the equity method of accounting for an investment:

Accepted Answer

A)  The investment account remains at initial value. 
B)  Dividends received are recorded as revenue. 
C)  Goodwill is amortized over 20 years. 
D)  Income reported by the subsidiary increases the investment account. 
E)  Dividends received increase the investment account. 
A)  The investment account remains at initial value. 
B)  Dividends received are recorded as revenue. 
C)  Goodwill is amortized over 20 years. 
D)  Income reported by the subsidiary increases the investment account. 
E)  Dividends received increase the investment account.

Exam 3: Consolidations - Subsequent to the Date of Acquisition

What was consolidated equipment as of December 31, 2018?

What is the basic objective of all consolidations?

Determine the amortization expense related to the consolidation at the year-end date of 12/31/24.

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?

How is the fair value allocation of an intangible asset allocated to expense when the asset has no legal, regulatory, contractual, competitive, economic, or other factors that limit its life?

At the end of 2017, the consolidation entry to eliminate Cale's accrual of Kaltop's earnings would include a credit to Investment in Kaltop Co.for

If Watkins pays $450,000 in cash for Glen, what acquisition-date fair value allocation, net of amortization, should be attributed to the subsidiary's Equipment in consolidation at December 31, 2019?

Private companies, with respect to goodwill:

According to GAAP regarding amortization of goodwill, which of the following statements is true?

What was consolidated net income for the year ended December 31, 2018?

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?

If the partial equity method had been applied, what was 2018 consolidated net income?

From which methods can a parent choose for its internal recordkeeping related to the operations of a subsidiary?

For an acquisition when the subsidiary maintains its incorporation, under the partial equity method, what adjustments are made to the balance of the investment account?

Compare the differences in accounting treatment for goodwill between U.S.GAAP and IFRS.

Assuming Rhine generates cash flow from operations of $27,200 in 2017, how will Harrison record the $16,500 payment of cash on April 15, 2018 in satisfaction of its contingent obligation?

Determine the amortization expense related to the combination at the year-end date of 12/31/16.

Under the equity method of accounting for an investment:

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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