Question 1

Under the acquisition method, what amount will be reported for consolidated retained earnings?

Accepted Answer

A)  $1,065,000. 
B)  $1,080,000. 
C)  $1,525,000. 
D)  $1,535,000. 
E)  $1,560,000. 
A)  $1,065,000. 
B)  $1,080,000. 
C)  $1,525,000. 
D)  $1,535,000. 
E)  $1,560,000. A

Question 2

Assume that Bullen issued preferred stock with a par value of $240,000 and a fair value of $500,000 for all of the outstanding shares of Vicker in an acquisition business combination.What will be the balance in the consolidated Inventory and Land accounts?

Accepted Answer

A)  $440,000, $496,000. 
B)  $440,000, $520,000. 
C)  $425,000, $505,000. 
D)  $400,000, $500,000. 
E)  $427,000, $510,000. 
A)  $440,000, $496,000. 
B)  $440,000, $520,000. 
C)  $425,000, $505,000. 
D)  $400,000, $500,000. 
E)  $427,000, $510,000. B

Question 3

What term is used to refer to a business combination in which only one of the original companies continues to exist?

Accepted Answer

The appropriate term is statutory merger.

Question 4

How is contingent consideration accounted for in an acquisition business combination transaction?

Accepted Answer

The fair value approach of the acquisiti

Question 5

In this acquisition business combination, what total amount of common stock and additional paid-in capital should Goodwin recognize on its consolidated financial statements?

Accepted Answer

A)  $ 265. 
B)  $1,165. 
C)  $1,200. 
D)  $1,235. 
E)  $1,765. 
A)  $ 265. 
B)  $1,165. 
C)  $1,200. 
D)  $1,235. 
E)  $1,765.

Question 6

Which of the following statements is true regarding a statutory merger?

Accepted Answer

A)  The original companies dissolve while remaining as separate divisions of a newly created company. 
B)  Both companies remain in existence as legal corporations with one corporation now a subsidiary of the acquiring company. 
C)  The acquired company dissolves as a separate corporation and becomes a division of the acquiring company. 
D)  The acquiring company acquires the stock of the acquired company as an investment. 
E)  A statutory merger is no longer a legal option. 
A)  The original companies dissolve while remaining as separate divisions of a newly created company. 
B)  Both companies remain in existence as legal corporations with one corporation now a subsidiary of the acquiring company. 
C)  The acquired company dissolves as a separate corporation and becomes a division of the acquiring company. 
D)  The acquiring company acquires the stock of the acquired company as an investment. 
E)  A statutory merger is no longer a legal option.

Question 7

Compute consolidated land at the date of the acquisition.

Accepted Answer

A)  $2,060. 
B)  $1,800. 
C)  $ 260. 
D)  $2,050. 
E)  $2,070. 
A)  $2,060. 
B)  $1,800. 
C)  $ 260. 
D)  $2,050. 
E)  $2,070.

Question 8

Compute consolidated land immediately following the acquisition.

Accepted Answer

A)  $2,060. 
B)  $1,800. 
C)  $ 260. 
D)  $2,050. 
E)  $2,070. 
A)  $2,060. 
B)  $1,800. 
C)  $ 260. 
D)  $2,050. 
E)  $2,070.

Question 9

What amount will be reported for consolidated long-term liabilities?

Accepted Answer

A)  $1,520,000. 
B)  $1,480,000. 
C)  $1,440,000. 
D)  $1,180,000. 
E)  $1,100,000. 
A)  $1,520,000. 
B)  $1,480,000. 
C)  $1,440,000. 
D)  $1,180,000. 
E)  $1,100,000.

Question 10

Compute the amount of consolidated common stock at date of acquisition.

Accepted Answer

A)  $370. 
B)  $570. 
C)  $610. 
D)  $330. 
E)  $530. 
A)  $370. 
B)  $570. 
C)  $610. 
D)  $330. 
E)  $530.

Question 11

What amount will be reported for consolidated receivables?

Accepted Answer

A)  $660,000. 
B)  $640,000. 
C)  $500,000. 
D)  $460,000. 
E)  $480,000. 
A)  $660,000. 
B)  $640,000. 
C)  $500,000. 
D)  $460,000. 
E)  $480,000.

Question 12

Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding shares of Vicker.What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2018 balances) as a result of this acquisition transaction?

Accepted Answer

A)  $60,000 and $490,000. 
B)  $60,000 and $250,000. 
C)  $380,000 and $250,000. 
D)  $524,000 and $250,000. 
E)  $524,000 and $420,000. 
A)  $60,000 and $490,000. 
B)  $60,000 and $250,000. 
C)  $380,000 and $250,000. 
D)  $524,000 and $250,000. 
E)  $524,000 and $420,000.

Question 13

What amount will be reported for consolidated buildings (net)?

Accepted Answer

A)  $1,420,000. 
B)  $1,260,000. 
C)  $1,140,000. 
D)  $1,480,000. 
E)  $1,200,000. 
A)  $1,420,000. 
B)  $1,260,000. 
C)  $1,140,000. 
D)  $1,480,000. 
E)  $1,200,000.

Question 14

Compute the consolidated revenues for 2018.

Accepted Answer

A)  $2,700. 
B)  $ 720. 
C)  $ 920. 
D)  $3,300. 
E)  $1,540. 
A)  $2,700. 
B)  $ 720. 
C)  $ 920. 
D)  $3,300. 
E)  $1,540.

Question 15

How are bargain purchases accounted for in an acquisition business transaction?

Accepted Answer

A bargain purchase results when the coll

Question 16

Assume that Bullen paid a total of $480,000 in cash for all of the shares of Vicker.In addition, Bullen paid $35,000 for secretarial and management time allocated to the acquisition transaction.What will be the balance in consolidated goodwill?

Accepted Answer

A)  $ 0. 
B)  $20,000. 
C)  $35,000. 
D)  $55,000. 
E)  $65,000. 
A)  $ 0. 
B)  $20,000. 
C)  $35,000. 
D)  $55,000. 
E)  $65,000.

Question 17

With respect to recognizing and measuring the fair value of a business combination in accordance with the acquisition method of accounting, which of the following should the acquirer consider when determining fair value?

Accepted Answer

A)  Only assets received by the acquirer. 
B)  Only consideration transferred by the acquirer. 
C)  The consideration transferred by the acquirer plus the fair value of assets received less liabilities assumed. 
D)  The par value of stock transferred by the acquirer, and the book value of identifiable assets transferred by the entity acquired. 
E)  The book value of identifiable assets transferred to the acquirer as part of the business combination less any liabilities assumed. 
A)  Only assets received by the acquirer. 
B)  Only consideration transferred by the acquirer. 
C)  The consideration transferred by the acquirer plus the fair value of assets received less liabilities assumed. 
D)  The par value of stock transferred by the acquirer, and the book value of identifiable assets transferred by the entity acquired. 
E)  The book value of identifiable assets transferred to the acquirer as part of the business combination less any liabilities assumed.

Question 18

Compute consolidated equipment immediately following the acquisition.

Accepted Answer

A)  $ 400. 
B)  $ 660. 
C)  $1,060. 
D)  $1,040. 
E)  $1,050. 
A)  $ 400. 
B)  $ 660. 
C)  $1,060. 
D)  $1,040. 
E)  $1,050.

Question 19

Determine the balance for Goodwill that would be included in a December 1, 2017, consolidation.

Accepted Answer

Fair value of consideration transferred:

Question 20

A statutory merger is a(n)

Accepted Answer

A)  Business combination in which only one of the two companies continues to exist as a legal corporation. 
B)  Business combination in which both companies continue to exist. 
C)  Acquisition of a competitor. 
D)  Acquisition of a supplier or a customer. 
E)  Legal proposal to acquire outstanding shares of the target's stock. 
A)  Business combination in which only one of the two companies continues to exist as a legal corporation. 
B)  Business combination in which both companies continue to exist. 
C)  Acquisition of a competitor. 
D)  Acquisition of a supplier or a customer. 
E)  Legal proposal to acquire outstanding shares of the target's stock.

Exam 2: A: Consolidation of Financial Information

Under the acquisition method, what amount will be reported for consolidated retained earnings?

Assume that Bullen issued preferred stock with a par value of $240,000 and a fair value of $500,000 for all of the outstanding shares of Vicker in an acquisition business combination.What will be the balance in the consolidated Inventory and Land accounts?

What term is used to refer to a business combination in which only one of the original companies continues to exist?

How is contingent consideration accounted for in an acquisition business combination transaction?

In this acquisition business combination, what total amount of common stock and additional paid-in capital should Goodwin recognize on its consolidated financial statements?

Which of the following statements is true regarding a statutory merger?

Compute consolidated land at the date of the acquisition.

Compute consolidated land immediately following the acquisition.

What amount will be reported for consolidated long-term liabilities?

Compute the amount of consolidated common stock at date of acquisition.

What amount will be reported for consolidated receivables?

Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding shares of Vicker.What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2018 balances) as a result of this acquisition transaction?

What amount will be reported for consolidated buildings (net)?

Compute the consolidated revenues for 2018.

How are bargain purchases accounted for in an acquisition business transaction?

Assume that Bullen paid a total of $480,000 in cash for all of the shares of Vicker.In addition, Bullen paid $35,000 for secretarial and management time allocated to the acquisition transaction.What will be the balance in consolidated goodwill?

With respect to recognizing and measuring the fair value of a business combination in accordance with the acquisition method of accounting, which of the following should the acquirer consider when determining fair value?

Compute consolidated equipment immediately following the acquisition.

Determine the balance for Goodwill that would be included in a December 1, 2017, consolidation.

A statutory merger is a(n)

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

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

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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