Question 1

Compute consolidated inventory immediately following the acquisition.

Accepted Answer

A)  $1,650. 
B)  $1,810. 
C)  $1,230. 
D)  $ 580. 
E)  $1,830. 
A)  $1,650. 
B)  $1,810. 
C)  $1,230. 
D)  $ 580. 
E)  $1,830.

Question 2

Compute consolidated revenues immediately following the acquisition.

Accepted Answer

A)  $3,540. 
B)  $2,880. 
C)  $1,170. 
D)  $1,650. 
E)  $4,050. 
A)  $3,540. 
B)  $2,880. 
C)  $1,170. 
D)  $1,650. 
E)  $4,050.

Question 3

Fine Co.issued its common stock in exchange for the common stock of Dandy Corp.in an acquisition.At the date of the combination, Fine had land with a book value of $480,000 and a fair value of $620,000.Dandy had land with a book value of $170,000 and a fair value of $190,000.
Required:
What was the consolidated balance for Land in a consolidated balance sheet prepared at the date of the acquisition combination?

Accepted Answer

The answer of Fine Co.issued its common stock in exchange...

Question 4

Compute consolidated revenues immediately following the acquisition.

Accepted Answer

A)  $3,540. 
B)  $2,880. 
C)  $1,170. 
D)  $1,650. 
E)  $4,050. 
A)  $3,540. 
B)  $2,880. 
C)  $1,170. 
D)  $1,650. 
E)  $4,050.

Question 5

Compute the amount of consolidated cash after recording the acquisition transaction.

Accepted Answer

A)  $220. 
B)  $185. 
C)  $200. 
D)  $205. 
E)  $215. 
A)  $220. 
B)  $185. 
C)  $200. 
D)  $205. 
E)  $215.

Question 6

In a transaction accounted for using the acquisition method where consideration transferred is less than fair value of net assets acquired, which statement is true?

Accepted Answer

A)  Negative goodwill is recorded. 
B)  A deferred credit is recorded. 
C)  A gain on bargain purchase is recorded. 
D)  Long-term assets of the acquired company are reduced in proportion to their fair values. Any excess is recorded as a deferred credit. 
E)  Long-term assets and liabilities of the acquired company are reduced in proportion to their fair values. Any excess is recorded as gain. 
A)  Negative goodwill is recorded. 
B)  A deferred credit is recorded. 
C)  A gain on bargain purchase is recorded. 
D)  Long-term assets of the acquired company are reduced in proportion to their fair values. Any excess is recorded as a deferred credit. 
E)  Long-term assets and liabilities of the acquired company are reduced in proportion to their fair values. Any excess is recorded as gain.

Question 7

Compute the amount of the consideration transferred by Atwood to acquire Franz.

Accepted Answer

A)  $1,750. 
B)  $1,760. 
C)  $1,775. 
D)  $1,300. 
E)  $1,120. 
A)  $1,750. 
B)  $1,760. 
C)  $1,775. 
D)  $1,300. 
E)  $1,120.

Question 8

What is the amount of goodwill arising from this acquisition?

Accepted Answer

A)  $230. 
B)  $120. 
C)  $520. 
D)  None. There is a gain on bargain purchase of $230. 
E)  None. There is a gain on bargain purchase of $265. 
A)  $230. 
B)  $120. 
C)  $520. 
D)  None. There is a gain on bargain purchase of $230. 
E)  None. There is a gain on bargain purchase of $265.

Question 9

At the date of acquisition, by how much does Riley's additional paid-in capital increase or decrease?

Accepted Answer

A)  $ 0. 
B)  $440,000 increase. 
C)  $450,000 increase. 
D)  $640,000 increase. 
E)  $650,000 decrease. 
A)  $ 0. 
B)  $440,000 increase. 
C)  $450,000 increase. 
D)  $640,000 increase. 
E)  $650,000 decrease.

Question 10

Compute consolidated buildings (net) at the date of 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 11

Peterman Co.owns 55% of Samson Co.Under what circumstances would Peterman not be required to prepare consolidated financial statements?

Accepted Answer

Peterman would not be required to prepar

Question 12

Required:
Determine consolidated net income for the year ended December 31, 2017.

Accepted Answer

The answer of Required:
Determine consolidated net income for the year...

Question 13

Compute the consolidated common stock account at December 31, 2018.

Accepted Answer

A)  $1,080. 
B)  $1,480. 
C)  $1,380. 
D)  $2,280. 
E)  $2,680. 
A)  $1,080. 
B)  $1,480. 
C)  $1,380. 
D)  $2,280. 
E)  $2,680.

Question 14

Compute consolidated long-term liabilities at the date of the acquisition.

Accepted Answer

A)  $2,600. 
B)  $2,700. 
C)  $2,800. 
D)  $3,720. 
E)  $3,820. 
A)  $2,600. 
B)  $2,700. 
C)  $2,800. 
D)  $3,720. 
E)  $3,820.

Question 15

Compute the consolidated additional paid-in capital at December 31, 2018.

Accepted Answer

A)  $ 810. 
B)  $1,350. 
C)  $1,675. 
D)  $1,910. 
E)  $1,875. 
A)  $ 810. 
B)  $1,350. 
C)  $1,675. 
D)  $1,910. 
E)  $1,875.

Question 16

Compute the consolidated expenses for 2018.

Accepted Answer

A)  $1,980. 
B)  $2,005. 
C)  $2,040. 
D)  $2,380. 
E)  $2,405. 
A)  $1,980. 
B)  $2,005. 
C)  $2,040. 
D)  $2,380. 
E)  $2,405.

Question 17

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

Accepted Answer

A)  $385,000. 
B)  $335,000. 
C)  $435,000. 
D)  $460,000. 
E)  $360,000. 
A)  $385,000. 
B)  $335,000. 
C)  $435,000. 
D)  $460,000. 
E)  $360,000.

Question 18

By how much will Flynn's additional paid-in capital increase as a result of this acquisition?

Accepted Answer

A)  $150,000. 
B)  $160,000. 
C)  $230,000. 
D)  $350,000. 
E)  $360,000. 
A)  $150,000. 
B)  $160,000. 
C)  $230,000. 
D)  $350,000. 
E)  $360,000.

Question 19

What is the primary difference between: (i) accounting for a business combination when the subsidiary is dissolved; and (ii) accounting for a business combination when the subsidiary retains its incorporation?

Accepted Answer

A)  If the subsidiary is dissolved, it will not be operated as a separate division. 
B)  If the subsidiary is dissolved, assets and liabilities are consolidated at their book values. 
C)  If the subsidiary retains its incorporation, there will be no goodwill associated with the acquisition. 
D)  If the subsidiary retains its incorporation, assets and liabilities are consolidated at their book values. 
E)  If the subsidiary retains its incorporation, the consolidation is not formally recorded in the accounting records of the acquiring company. 
A)  If the subsidiary is dissolved, it will not be operated as a separate division. 
B)  If the subsidiary is dissolved, assets and liabilities are consolidated at their book values. 
C)  If the subsidiary retains its incorporation, there will be no goodwill associated with the acquisition. 
D)  If the subsidiary retains its incorporation, assets and liabilities are consolidated at their book values. 
E)  If the subsidiary retains its incorporation, the consolidation is not formally recorded in the accounting records of the acquiring company.

Question 20

Elon Corp.obtained all of the common stock of Finley Co., paying slightly less than the fair value of Finley's net assets acquired.How should the difference between the consideration transferred and the fair value of the net assets be treated if the transaction is accounted for as an acquisition?

Accepted Answer

The difference between the con

Exam 2: A: Consolidation of Financial Information

Compute consolidated inventory immediately following the acquisition.

Compute consolidated revenues immediately following the acquisition.

Compute consolidated revenues immediately following the acquisition.

Compute the amount of consolidated cash after recording the acquisition transaction.

In a transaction accounted for using the acquisition method where consideration transferred is less than fair value of net assets acquired, which statement is true?

Compute the amount of the consideration transferred by Atwood to acquire Franz.

What is the amount of goodwill arising from this acquisition?

At the date of acquisition, by how much does Riley's additional paid-in capital increase or decrease?

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

Peterman Co.owns 55% of Samson Co.Under what circumstances would Peterman not be required to prepare consolidated financial statements?

Required: Determine consolidated net income for the year ended December 31, 2017.

Compute the consolidated common stock account at December 31, 2018.

Compute consolidated long-term liabilities at the date of the acquisition.

Compute the consolidated additional paid-in capital at December 31, 2018.

Compute the consolidated expenses for 2018.

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

By how much will Flynn's additional paid-in capital increase as a result of this acquisition?

What is the primary difference between: (i) accounting for a business combination when the subsidiary is dissolved; and (ii) accounting for a business combination when the subsidiary retains its incorporation?

Elon Corp.obtained all of the common stock of Finley Co., paying slightly less than the fair value of Finley's net assets acquired.How should the difference between the consideration transferred and the fair value of the net assets be treated if the transaction is accounted for as an acquisition?

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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