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

Prince Company acquires Duchess, Inc.on January 1, 2016.At the date of acquisition, Duchess has long-term debt with a fair value of $1,500,000 and a carrying amount of $1,200,000. With respect to long-term debt consolidation worksheet adjustments in periods following the acquisition, which of the following is correct:

If Watkins pays $300,000 in cash for Glen, at what amount would the subsidiary's Building be represented in a January 2, 2017 consolidation?

Red Co.acquired 100% of Green, Inc.on January 1, 2017.On that date, Green had land with a book value of $42,000 and a fair value of $52,000.Also, on the date of acquisition, Green had a building with a book value of $200,000 and a fair value of $390,000.Green had equipment with a book value of $350,000 and a fair value of $280,000.The building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life.How much total expense will be in the consolidated financial statements for the year ended December 31, 2017 related to the acquisition allocations of Green?

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

Jansen Inc.acquired all of the outstanding common stock of Merriam Co.on January 1, 2017, for $257,000.Annual amortization of $19,000 resulted from this acquisition.Jansen reported net income of $70,000 in 2017 and $50,000 in 2018 and paid $22,000 in dividends each year.Merriam reported net income of $40,000 in 2017 and $47,000 in 2018 and paid $10,000 in dividends each year.What is the Investment in Merriam Co.balance on Jansen's books as of December 31, 2018, if the equity method has been applied?

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?

All of the following are acceptable methods to account for a majority-owned investment in subsidiary except

In Cale's accounting records, what amount would appear on December 31, 2017 for equity in subsidiary earnings?

Compute the amount of Hurley's long-term liabilities that would be reported in a December 31, 2017, consolidated balance sheet.

Dutch Co.has loaned $90,000 to its subsidiary, Hans Corp., which retains separate incorporation.How would this loan be treated on a consolidated balance sheet?

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

How much difference would there have been in Franel's income with regard to the effect of the investment, between using the equity method or using the partial equity method of internal recordkeeping?

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

Assume the initial value method is applied.How much equity income will Kaye report on its internal accounting records as a result of Fiore's operations?

When consolidating parent and subsidiary financial statements, which of the following statements is true?

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?

Avery Company acquires Billings Company in a combination accounted for as an acquisition and adopts the equity method to account for Investment in Billings.At the end of four years, the Investment in Billings account on Avery's books is $198,984.What items constitute this balance?

How much difference would there have been in Franel's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping?

If Watkins pays $450,000 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?

Which of Pritchett's reporting units require both steps to test for goodwill impairment?