Exam 3: A: Consolidations - Subsequent to the Date of Acquisition

Explore all topics

Paperless Co.acquired Sheetless Co.and in effecting this business combination, there was a cash-flow performance contingency to be paid in cash, and a market-price performance contingency to be paid in additional shares of stock.In what accounts and in what section(s) of a consolidated balance sheet are these contingent consideration items shown?

Free

(Essay)

4.8/5

(44)

Question 1

Correct Answer:

Verified

A cash-flow performance contingency is shown as a contingent performance obligation, which is in the liability section of the consolidated balance sheet. A market-price performance contingency to be paid in stock is shown as additional paid-in capital - contingent equity outstanding, which is in the stockholders' equity section of the consolidated balance sheet.

What will Harrison record as its Investment in Rhine on January 1, 2017?

Free

(Multiple Choice)

4.8/5

(34)

Question 2

Correct Answer:

Verified

What will Beatty record as its Investment in Gataux on January 1, 2017?

Free

(Multiple Choice)

4.8/5

(35)

Question 3

Correct Answer:

Verified

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

(Essay)

4.7/5

(34)

Question 4

If the parent's net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2018?

(Essay)

4.9/5

(35)

Question 5

According to the FASB ASC regarding the testing procedures for Goodwill Impairment, the proper procedure for conducting impairment testing is:

(Multiple Choice)

4.7/5

(36)

Question 6

Compute the December 31, 2020, consolidated additional paid-in capital.

(Multiple Choice)

4.7/5

(32)

Question 7

Compute the consideration transferred in excess of book value acquired at January 1, 2017.

(Multiple Choice)

4.8/5

(42)

Question 8

How is the goodwill impairment process simplified for private companies?

(Essay)

4.7/5

(37)

Question 9

If Watkins pays $400,000 in cash for Glen, what amount would be represented as the subsidiary's Building in a consolidation at December 31, 2019, assuming the book value of the building at that date is still $200,000?

(Multiple Choice)

4.7/5

(36)

Question 10

Compute the amount of Hurley's long-term liabilities that would be reported in a December 31, 2018, consolidated balance sheet.

(Multiple Choice)

4.7/5

(37)

Question 11

What was consolidated equipment as of December 31, 2018?

(Essay)

4.8/5

(42)

Question 12

If Watkins pays $450,000 in cash for Glen, what amount would be represented as the subsidiary's Equipment in a consolidation at December 31, 2019, assuming the book value of the equipment at that date is still $80,000?

(Multiple Choice)

4.9/5

(36)

Question 13

If Cale Corp.had net income of $444,000 in 2017, exclusive of the investment, what is the amount of consolidated net income?

(Multiple Choice)

4.8/5

(36)

Question 14

Compute the December 31, 2020, consolidated total expenses.

(Multiple Choice)

4.9/5

(34)

Question 15

Compute goodwill, if any, at January 1, 2017.

(Multiple Choice)

4.7/5

(35)

Question 16

Using the acquisition method, how will Beatty record the stock contingency?

(Multiple Choice)

4.9/5

(45)

Question 17

Assume the initial value method is used.In the year subsequent to acquisition, what additional worksheet entry must be made for consolidation purposes that is not required for the equity method?

(Multiple Choice)

4.8/5

(38)

Question 18

For recognized intangible assets that are considered to possess indefinite lives, what is the accounting treatment for purposes of income recognition?

(Essay)

4.8/5

(35)

Question 19

When is a goodwill impairment loss recognized?

(Multiple Choice)

4.9/5

(38)

Question 20

Showing 1 - 20 of 120

Exam 3: A: Consolidations - Subsequent to the Date of Acquisition

What will Harrison record as its Investment in Rhine on January 1, 2017?

What will Beatty record as its Investment in Gataux on January 1, 2017?

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

If the parent's net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2018?

According to the FASB ASC regarding the testing procedures for Goodwill Impairment, the proper procedure for conducting impairment testing is:

Compute the December 31, 2020, consolidated additional paid-in capital.

Compute the consideration transferred in excess of book value acquired at January 1, 2017.

How is the goodwill impairment process simplified for private companies?

If Watkins pays $400,000 in cash for Glen, what amount would be represented as the subsidiary's Building in a consolidation at December 31, 2019, assuming the book value of the building at that date is still $200,000?

Compute the amount of Hurley's long-term liabilities that would be reported in a December 31, 2018, consolidated balance sheet.

What was consolidated equipment as of December 31, 2018?

If Watkins pays $450,000 in cash for Glen, what amount would be represented as the subsidiary's Equipment in a consolidation at December 31, 2019, assuming the book value of the equipment at that date is still $80,000?

If Cale Corp.had net income of $444,000 in 2017, exclusive of the investment, what is the amount of consolidated net income?

Compute the December 31, 2020, consolidated total expenses.

Compute goodwill, if any, at January 1, 2017.

Using the acquisition method, how will Beatty record the stock contingency?

Assume the initial value method is used.In the year subsequent to acquisition, what additional worksheet entry must be made for consolidation purposes that is not required for the equity method?

For recognized intangible assets that are considered to possess indefinite lives, what is the accounting treatment for purposes of income recognition?

When is a goodwill impairment loss recognized?

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

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

Filters