Question 1

Determine consolidated Additional Paid-In Capital at December 31, 2017.

Accepted Answer

The answer of Determine consolidated Additional Paid-In Capital at December...

Question 2

Jernigan Corp.had the following account balances at 12/1/17:
   Several of Jernigan's accounts have fair values that differ from book value.The fair values are: Land - $480,000; Building - $720,000; Inventory - $336,000; and Liabilities - $396,000.
Inglewood Inc.acquired all of the outstanding common shares of Jernigan by issuing 20,000 shares of common stock having a $6 par value per share, but a $66 fair value per share.Stock issuance costs amounted to $12,000.
Required:
Prepare a fair value allocation and goodwill schedule at the date of the acquisition.

Accepted Answer

The answer of Jernigan Corp.had the following account balances at...

Question 3

Compute the consideration transferred for this acquisition at December 31, 2018.

Accepted Answer

A)  $ 900. 
B)  $1,165. 
C)  $1,200. 
D)  $1,765. 
E)  $1,800. 
A)  $ 900. 
B)  $1,165. 
C)  $1,200. 
D)  $1,765. 
E)  $1,800.

Question 4

If Osorio retains a separate corporate existence, what amount was recorded as the investment in Osorio?

Accepted Answer

A)  $930. 
B)  $820. 
C)  $800. 
D)  $835. 
E)  $815. 
A)  $930. 
B)  $820. 
C)  $800. 
D)  $835. 
E)  $815.

Question 5

Compute the consolidated common stock at the date of acquisition.

Accepted Answer

A)  $1,000. 
B)  $2,980. 
C)  $2,400. 
D)  $3,400. 
E)  $3,730. 
A)  $1,000. 
B)  $2,980. 
C)  $2,400. 
D)  $3,400. 
E)  $3,730.

Question 6

Compute the goodwill arising from this acquisition at December 31, 2018.

Accepted Answer

A)  $ 0. 
B)  $100. 
C)  $125. 
D)  $160. 
E)  $ 45. 
A)  $ 0. 
B)  $100. 
C)  $125. 
D)  $160. 
E)  $ 45.

Question 7

Using the acquisition method for a business combination, goodwill is generally calculated as the:

Accepted Answer

A)  Cost of the investment less the subsidiary's book value at the beginning of the year. 
B)  Cost of the investment less the subsidiary's book value at the acquisition date. 
C)  Cost of the investment less the subsidiary's fair value at the beginning of the year. 
D)  Cost of the investment less the subsidiary's fair value at acquisition date. 
E)  Zero, it is no longer allowed under federal law. 
A)  Cost of the investment less the subsidiary's book value at the beginning of the year. 
B)  Cost of the investment less the subsidiary's book value at the acquisition date. 
C)  Cost of the investment less the subsidiary's fair value at the beginning of the year. 
D)  Cost of the investment less the subsidiary's fair value at acquisition date. 
E)  Zero, it is no longer allowed under federal law.

Question 8

Bale Co.acquired Silo Inc.on December 31, 2018, in an acquisition business combination transaction.Bale's net income for the year was $1,400,000, while Silo had net income of $400,000 earned evenly during the year.Bale paid $100,000 in direct combination costs, $50,000 in indirect costs, and $30,000 in stock issuance costs to effect the combination.
Required:
What is consolidated net income for 2018?

Accepted Answer

@#IMG-DLM& Note: Silo's net income does

Question 9

In a business combination where a subsidiary retains its incorporation and which is accounted for under the acquisition method, how should stock issuance costs and direct combination costs be treated?

Accepted Answer

A)  Stock issuance costs and direct combination costs are expensed as incurred. 
B)  Direct combination costs are ignored, and the stock issuance costs result in a reduction to additional paid-in capital. 
C)  Direct combination costs are expensed as incurred and stock issuance costs result in a reduction to additional paid-in capital. 
D)  Both are treated as part of the acquisition consideration transferred. 
E)  Both reduce additional paid-in capital. 
A)  Stock issuance costs and direct combination costs are expensed as incurred. 
B)  Direct combination costs are ignored, and the stock issuance costs result in a reduction to additional paid-in capital. 
C)  Direct combination costs are expensed as incurred and stock issuance costs result in a reduction to additional paid-in capital. 
D)  Both are treated as part of the acquisition consideration transferred. 
E)  Both reduce additional paid-in capital.

Question 10

How would you account for in-process research and development acquired in a business combination accounted for as an acquisition?

Accepted Answer

In-Process Research and Develo

Question 11

Compute consolidated retained earnings at the date of the acquisition.

Accepted Answer

A)  $1,160. 
B)  $1,170. 
C)  $1,280. 
D)  $1,290. 
E)  $1,640. 
A)  $1,160. 
B)  $1,170. 
C)  $1,280. 
D)  $1,290. 
E)  $1,640.

Question 12

What amount will be reported for consolidated additional paid-in capital?

Accepted Answer

A)  $365,000. 
B)  $350,000. 
C)  $360,000. 
D)  $375,000. 
E)  $345,000. 
A)  $365,000. 
B)  $350,000. 
C)  $360,000. 
D)  $375,000. 
E)  $345,000.

Question 13

What will the consolidated common stock account be as a result of this acquisition?

Accepted Answer

A)  $ 300,000. 
B)  $ 990,000. 
C)  $1,000,000. 
D)  $1,590,000. 
E)  $1,600,000. 
A)  $ 300,000. 
B)  $ 990,000. 
C)  $1,000,000. 
D)  $1,590,000. 
E)  $1,600,000.

Question 14

Compute consolidated equipment (net) at the date of 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 15

Compute consolidated buildings (net) immediately following the acquisition.

Accepted Answer

A)  $2,450. 
B)  $2,340. 
C)  $1,800. 
D)  $ 650. 
E)  $1,690. 
A)  $2,450. 
B)  $2,340. 
C)  $1,800. 
D)  $ 650. 
E)  $1,690.

Question 16

Compute the consolidated liabilities at December 31, 2018.

Accepted Answer

A)  $1,500. 
B)  $2,100. 
C)  $2,320. 
D)  $2,920. 
E)  $2,885. 
A)  $1,500. 
B)  $2,100. 
C)  $2,320. 
D)  $2,920. 
E)  $2,885.

Question 17

Assuming the combination occurred prior to 2009 and was accounted for under the purchase method, what amount will be reported for consolidated retained earnings?

Accepted Answer

A)  $1,830,000. 
B)  $1,350,000. 
C)  $1,080,000. 
D)  $1,560,000. 
E)  $1,535,000. 
A)  $1,830,000. 
B)  $1,350,000. 
C)  $1,080,000. 
D)  $1,560,000. 
E)  $1,535,000.

Question 18

Lisa Co.paid cash for all of the voting common stock of Victoria Corp.Victoria will continue to exist as a separate corporation.Entries for the consolidation of Lisa and Victoria would be recorded in

Accepted Answer

A)  A worksheet. 
B)  Lisa's general journal. 
C)  Victoria's general journal. 
D)  Victoria's secret consolidation journal. 
E)  The general journals of both companies. 
A)  A worksheet. 
B)  Lisa's general journal. 
C)  Victoria's general journal. 
D)  Victoria's secret consolidation journal. 
E)  The general journals of both companies.

Question 19

Assume that Botkins acquired Volkerson on January 1, 2017 and that Volkerson maintains a separate corporate existence.At what amount did Botkins record the investment in Volkerson?

Accepted Answer

A)  $ 56,000. 
B)  $182,000. 
C)  $209,000. 
D)  $261,000. 
E)  $312,000. 
A)  $ 56,000. 
B)  $182,000. 
C)  $209,000. 
D)  $261,000. 
E)  $312,000.

Question 20

How are direct combination costs accounted for in an acquisition transaction?

Accepted Answer

In an acquisition, d

Exam 2: A: Consolidation of Financial Information

Determine consolidated Additional Paid-In Capital at December 31, 2017.

Compute the consideration transferred for this acquisition at December 31, 2018.

If Osorio retains a separate corporate existence, what amount was recorded as the investment in Osorio?

Compute the consolidated common stock at the date of acquisition.

Compute the goodwill arising from this acquisition at December 31, 2018.

Using the acquisition method for a business combination, goodwill is generally calculated as the:

In a business combination where a subsidiary retains its incorporation and which is accounted for under the acquisition method, how should stock issuance costs and direct combination costs be treated?

How would you account for in-process research and development acquired in a business combination accounted for as an acquisition?

Compute consolidated retained earnings at the date of the acquisition.

What amount will be reported for consolidated additional paid-in capital?

What will the consolidated common stock account be as a result of this acquisition?

Compute consolidated equipment (net) at the date of the acquisition.

Compute consolidated buildings (net) immediately following the acquisition.

Compute the consolidated liabilities at December 31, 2018.

Assuming the combination occurred prior to 2009 and was accounted for under the purchase method, what amount will be reported for consolidated retained earnings?

Lisa Co.paid cash for all of the voting common stock of Victoria Corp.Victoria will continue to exist as a separate corporation.Entries for the consolidation of Lisa and Victoria would be recorded in

Assume that Botkins acquired Volkerson on January 1, 2017 and that Volkerson maintains a separate corporate existence.At what amount did Botkins record the investment in Volkerson?

How are direct combination costs accounted for in an acquisition transaction?

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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