Question 1

Compute the noncontrolling interest in Demers at December 31, 2019.

Accepted Answer

A)  $135,600. 
B)  $137,000. 
C)  $112,000. 
D)  $100,000. 
E)  $118,600. 
A)  $135,600. 
B)  $137,000. 
C)  $112,000. 
D)  $100,000. 
E)  $118,600. A

Question 2

When a parent uses the initial value method throughout the year to account for its 80% investment in an acquired subsidiary, which of the following statements is true at the date immediately preceding the date on which adjustments are made on the consolidated worksheet?

Accepted Answer

A)  Parent company net income equals consolidated net income. 
B)  Parent company retained earnings equals consolidated retained earnings. 
C)  Parent company total assets equals consolidated total assets. 
D)  Parent company dividends equal consolidated dividends. 
E)  Goodwill is recorded on the parent's books. 
A)  Parent company net income equals consolidated net income. 
B)  Parent company retained earnings equals consolidated retained earnings. 
C)  Parent company total assets equals consolidated total assets. 
D)  Parent company dividends equal consolidated dividends. 
E)  Goodwill is recorded on the parent's books. D

Question 3

On January 1, 2020, Elva Corp.paid $750,000 for 80% of Fenton Co.when the book value of Fenton's net assets was $800,000.Fenton owned a building with a fair value of $150,000 and a book value of $120,000.
Required:
At what amount would the building appear on a consolidated balance sheet prepared immediately after the combination, under the acquisition method of accounting for business combinations?

Accepted Answer

The answer of On January 1, 2020, Elva Corp.paid $750,000...

Question 4

What is the total amount of goodwill recognized at the date of acquisition?

Accepted Answer

A)  $150,000. 
B)  $250,000. 
C)  $ 0. 
D)  $120,000. 
E)  $170,000. 
A)  $150,000. 
B)  $250,000. 
C)  $ 0. 
D)  $120,000. 
E)  $170,000.

Question 5

Compute Pell's investment in Demers at December 31, 2020.

Accepted Answer

A)  $625,000. 
B)  $664,800. 
C)  $592,400. 
D)  $500,000. 
E)  $572,000. 
A)  $625,000. 
B)  $664,800. 
C)  $592,400. 
D)  $500,000. 
E)  $572,000.

Question 6

On January 1, 2018, Vacker Co.acquired 70% of Carper Inc.by paying $650,000.This included a $20,000 control premium.Carper reported common stock on that date of $420,000 with retained earnings of $252,000.A building was undervalued in the company's financial records by $28,000.This building had a ten-year remaining life.Copyrights of $80,000 were to be recognized and amortized over 20 years.
Carper earned income and paid cash dividends as follows:
On December 31, 2020, Vacker owed $30,800 to Carper.There have been no changes in Carper's common stock account since the acquisition.
   Required:
If the equity method had been applied by Vacker for this acquisition, what were the consolidation entries needed as of December 31, 2020?

Accepted Answer

From the acquisition value, $28,000 was

Question 7

Compute the noncontrolling interest in the net income of Demers at December 31, 2019.

Accepted Answer

A)  $20,000. 
B)  $12,000. 
C)  $18,600. 
D)  $10,600. 
E)  $14,400. 
A)  $20,000. 
B)  $12,000. 
C)  $18,600. 
D)  $10,600. 
E)  $14,400.

Question 8

Compute Pell's investment account balance in Demers at December 31, 2021.

Accepted Answer

A)  $639,000. 
B)  $643,200. 
C)  $763,200. 
D)  $676,000. 
E)  $620,000. 
A)  $639,000. 
B)  $643,200. 
C)  $763,200. 
D)  $676,000. 
E)  $620,000.

Question 9

What amount of goodwill should be attributed to Perch at the date of acquisition?

Accepted Answer

A)  $150,000. 
B)  $250,000. 
C)  $ 0. 
D)  $120,000. 
E)  $170,000. 
A)  $150,000. 
B)  $250,000. 
C)  $ 0. 
D)  $120,000. 
E)  $170,000.

Question 10

How does a parent company account for the sale of a portion of an investment in a subsidiary?

Accepted Answer

If control is maintained after the sale,

Question 11

What amount should have been reported for the land in a consolidated balance sheet at the acquisition date?

Accepted Answer

A)  $ 52,500. 
B)  $ 70,000. 
C)  $ 75,000. 
D)  $ 92,500. 
E)  $100,000. 
A)  $ 52,500. 
B)  $ 70,000. 
C)  $ 75,000. 
D)  $ 92,500. 
E)  $100,000.

Question 12

How much does Pell record as Income from Demers for the year ended December 31, 2019?

Accepted Answer

A)  $80,000. 
B)  $74,400. 
C)  $73,000. 
D)  $42,400. 
E)  $41,000. 
A)  $80,000. 
B)  $74,400. 
C)  $73,000. 
D)  $42,400. 
E)  $41,000.

Question 13

What is the total amount of excess land allocation at the acquisition date?

Accepted Answer

A)  $ 0. 
B)  $30,000. 
C)  $22,500. 
D)  $25,000. 
E)  $17,500. 
A)  $ 0. 
B)  $30,000. 
C)  $22,500. 
D)  $25,000. 
E)  $17,500.

Question 14

In consolidation at December 31, 2020, what adjustment is necessary for Hogan's Land account?

Accepted Answer

A)  $7,000 decrease. 
B)  $7,000 increase. 
C)  $6,300 increase. 
D)  $6,300 decrease. 
E)  No adjustment is necessary. 
A)  $7,000 decrease. 
B)  $7,000 increase. 
C)  $6,300 increase. 
D)  $6,300 decrease. 
E)  No adjustment is necessary.

Question 15

In consolidation at January 1, 2019, what adjustment is necessary for Hogan's Buildings account?

Accepted Answer

A)  $2,000 increase. 
B)  $2,000 decrease. 
C)  $1,800 increase. 
D)  $1,800 decrease. 
E)  No change. 
A)  $2,000 increase. 
B)  $2,000 decrease. 
C)  $1,800 increase. 
D)  $1,800 decrease. 
E)  No change.

Question 16

Compute Pell's investment in Demers at December 31, 2021.

Accepted Answer

A)  $780,000. 
B)  $660,000. 
C)  $785,000. 
D)  $676,000. 
E)  $620,000. 
A)  $780,000. 
B)  $660,000. 
C)  $785,000. 
D)  $676,000. 
E)  $620,000.

Question 17

Compute the noncontrolling interest in the net income of Demers at December 31, 2019.

Accepted Answer

A)  $20,000. 
B)  $12,000. 
C)  $18,600. 
D)  $10,600. 
E)  $14,400. 
A)  $20,000. 
B)  $12,000. 
C)  $18,600. 
D)  $10,600. 
E)  $14,400.

Question 18

What is the effect of including Kailey in consolidated net income for 2019?

Accepted Answer

A)  $31,000. 
B)  $33,000. 
C)  $55,000. 
D)  $60,000. 
E)  $39,000. 
A)  $31,000. 
B)  $33,000. 
C)  $55,000. 
D)  $60,000. 
E)  $39,000.

Question 19

In consolidation at December 31, 2019, what adjustment is necessary for Hogan's Buildings account?

Accepted Answer

A)  $1,620 increase. 
B)  $1,620 decrease. 
C)  $1,800 increase. 
D)  $1,800 decrease. 
E)  No adjustment is necessary. 
A)  $1,620 increase. 
B)  $1,620 decrease. 
C)  $1,800 increase. 
D)  $1,800 decrease. 
E)  No adjustment is necessary.

Question 20

Compute Pell's investment in Demers at December 31, 2019.

Accepted Answer

A)  $625,000. 
B)  $574,400. 
C)  $548,000. 
D)  $542,400. 
E)  $532,000. 
A)  $625,000. 
B)  $574,400. 
C)  $548,000. 
D)  $542,400. 
E)  $532,000.

Exam 4: A: Consolidated Financial Statements and Outside Ownership

Compute the noncontrolling interest in Demers at December 31, 2019.

When a parent uses the initial value method throughout the year to account for its 80% investment in an acquired subsidiary, which of the following statements is true at the date immediately preceding the date on which adjustments are made on the consolidated worksheet?

What is the total amount of goodwill recognized at the date of acquisition?

Compute Pell's investment in Demers at December 31, 2020.

Compute the noncontrolling interest in the net income of Demers at December 31, 2019.

Compute Pell's investment account balance in Demers at December 31, 2021.

What amount of goodwill should be attributed to Perch at the date of acquisition?

How does a parent company account for the sale of a portion of an investment in a subsidiary?

What amount should have been reported for the land in a consolidated balance sheet at the acquisition date?

How much does Pell record as Income from Demers for the year ended December 31, 2019?

What is the total amount of excess land allocation at the acquisition date?

In consolidation at December 31, 2020, what adjustment is necessary for Hogan's Land account?

In consolidation at January 1, 2019, what adjustment is necessary for Hogan's Buildings account?

Compute Pell's investment in Demers at December 31, 2021.

Compute the noncontrolling interest in the net income of Demers at December 31, 2019.

What is the effect of including Kailey in consolidated net income for 2019?

In consolidation at December 31, 2019, what adjustment is necessary for Hogan's Buildings account?

Compute Pell's investment in Demers at December 31, 2019.

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

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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