Exam 3: The Reporting Entity and the Consolidation of Less-Than-Wholly- Owned Subsidiaries With No Differential

On January 1,20X8,Potter Corporation acquired 90 percent of Shoemaker Company's voting stock,at underlying book value.The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date.Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker.On December 31,20X9,the trial balances of the two companies are as follows: -Based on the preceding information,what amount would be reported as noncontrolling interest in the consolidated balance sheet at December 31,20X9?

On January 1,20X9,Pallet Company acquires 80 percent ownership in Slat Corporation for $200,000.The fair value of the noncontrolling interest at that time is determined to be $50,000.Slat reports net assets with a book value of $250,000 and fair value of $250,000.Pallet Company reports net assets with a book value of $600,000 and a fair value of $650,000 at that time,excluding its investment in Slat.What will be the amount of consolidated net assets that would be reported immediately after the combination?

All of the following statements accurately describe Special Purpose Entities (SPEs)except for:

On January 1,20X8,Potter Corporation acquired 90 percent of Shoemaker Company's voting stock,at underlying book value.The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date.Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker.On December 31,20X9,the trial balances of the two companies are as follows: -Based on the preceding information,what amount would be reported as income to controlling interest in the consolidated financial statements for 20X9?

On January 1,20X8,Potter Corporation acquired 90 percent of Shoemaker Company's voting stock,at underlying book value.The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date.Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker.On December 31,20X9,the trial balances of the two companies are as follows: -Based on the preceding information,what amount would be reported as retained earnings in the consolidated balance sheet prepared at December 31,20X9?

On January 1,20X8,Potter Corporation acquired 90 percent of Shoemaker Company's voting stock,at underlying book value.The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date.Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker.On December 31,20X9,the trial balances of the two companies are as follows: -Based on the preceding information,what amount would be reported as total assets in the consolidated balance sheet at December 31,20X9?

Paul Corporation owns 70 percent of the voting common shares of Sally Corporation,purchased at book value.Noncontrolling interest was assigned $21,000 of income in the 20X0 consolidated income statement.What amount of net income did Sally Corporation report for the year?

On December 31,20X9,Play Company acquired 80 percent of the common stock of Station Company.At the time,Play held land with a book value of $100,000 and a fair value of $260,000;Station held land with a book value of $600,000 and fair value of $600,000.At what amount would land be reported in a consolidated balance sheet prepared immediately after the combination?

On January 1,20X8,Potter Corporation acquired 90 percent of Shoemaker Company's voting stock,at underlying book value.The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date.Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker.On December 31,20X9,the trial balances of the two companies are as follows: -Based on the preceding information,what amount would be reported as total stockholders' equity in the consolidated balance sheet at December 31,20X9?

On January 2,20X2,Piranha Company acquired 70 percent of Salmon Corporation's common stock for $420,000 cash.At the acquisition date,the book values and fair values of Salmon' assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 30 percent of the total book value of Salmon.The stockholders' equity accounts of the two companies at the acquisition date are as follows: Noncontrolling interest was assigned income of $15,000 in Piranha's consolidated income statement for 20X2. -Based on the preceding information,what amount will be assigned to noncontrolling interest on January 2,20X2,in the consolidated balance sheet?

On January 2,20X2,Piranha Company acquired 70 percent of Salmon Corporation's common stock for $420,000 cash.At the acquisition date,the book values and fair values of Salmon' assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 30 percent of the total book value of Salmon.The stockholders' equity accounts of the two companies at the acquisition date are as follows: Noncontrolling interest was assigned income of $15,000 in Piranha's consolidated income statement for 20X2. -Based on the preceding information,what is the total stockholders' equity in the consolidated balance sheet as of January 2,20X2?

Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31,20X9.On the date of acquisition,Princeton held land with a book value of $150,000 and a fair value of $300,000;Sheffield held land with a book value of $500,000 and fair value of $500,000.At what amount would land be reported in a consolidated balance sheet prepared immediately after the combination?

For which of the following reporting units is the preparation of combined financial statements most appropriate?

On January 3,20X9,Pleat Company acquired 80 percent of Stitch Corporation's common stock for $344,000 in cash.At the acquisition date,the book values and fair values of Stitch's assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Stitch.The stockholders' equity accounts of the two companies at the acquisition date are: Noncontrolling interest was assigned income of $11,000 in Pleat's consolidated income statement for 20X9. -Based on the preceding information,what will be the amount of net income reported by Stitch Corporation in 20X9?

Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo.Company Esstwo owns 100 percent of Company Essthree.Consolidated financial statements should be prepared to report the financial status and results of operations for:

Putter Corporation owns 80 percent of the voting common shares of Sand Corporation.Noncontrolling interest was assigned $24,000 of income in the 20X9 consolidated income statement.What amount of net income did Sand Corporation report for the year?

Pluto Company owns 80 percent of the common stock of Star Corporation.During the year,Pluto reported sales of $1,000,000,and Star reported sales of $500,000,including sales to Pluto of $80,000.The amount of sales that should be reported in the consolidated income statement for the year is:

Primo Corporation acquired 60 percent of Secondo Corporation's voting common stock.On the date of acquisition,Primo had equipment with a book value of $50,000 and a fair value of $150,000.Secondo's buildings and equipment had a book value of $200,000 and a fair value of $200,000 at the time of the acquisition.What will be the amount at which buildings and equipment will be reported in consolidated statements immediately following the acquisition?

Consolidated financial statements tend to be most useful for: