10 May WHICH IS ONE REASON THE ACQUIRING COMPANY MIGHT HAVE MADE THIS DECISION?
ACCT405 Week 1 Quiz Latest 2017 OctoberQuestion 14 / 4 pts(TCO 1) Which of the following results in a decrease in the equity in investee income account when applying the equity method?Dividends paid by the investorNet income of the investeeUnrealized gain on intercompany inventory transfers for the current yearUnrealized gain on intercompany inventory transfers for the prior yearQuestion 20 / 4 pts(TCO 1) In a situation where the investor exercises significant influence over the investee which of the following entries is not actually posted to the books of the investor?(1) Debit to the investment account and a credit to the equity in investee income account(2) Debit to cash (for dividends received from the investee) and a credit to dividend revenue(3) Debit to cash (for dividends received from the investee) and a credit to the investment accountEntries 1 and 2Entries 2 and 3Entry 1 onlyEntry 2 onlyEntry 3 onlyQuestion 34 / 4 pts(TCO 1) A company should always use the equity method to account for an investment ifit has the ability to exercise significant influence over the operating policies of the investee.it owns 30% of another company’s stock.it has a controlling interest (more than 50%) of another company’s stock.the investment was made primarily to earn a return on excess cash.it does not have the ability to exercise significant influence over the operating policies of the investee.Question 44 / 4 pts(TCO 1) George Company owns 15% of the common stock of Thomas Corporation and used the fair-value method to account for this investment. Thomas reported net income of $110 000 for the year 20×1 and paid dividends of $60 000 on October 1 20×1. How much income should George recognize on this investment in 20×1?$16 500$9 000$25 500$7 500$60 000Question 54 / 4 pts(TCO 1) According to FAS 159 all entities may elect the fair value option.the statement permits all entities to choose to measure eligible items at fair value at specified dates.the fair value option may be applied instrument by instrument with a few exceptions.FAS 159 is similar to IAS 39 but is not identical.ACCT405 Week 2 Quiz Latest 2017 OctoberQuestion 14 / 4 pts(TCO 2) Which of the following is a characteristic of a business combination that should be accounted for as an acquisition?The combination must involve the exchange of equity securities only.The transaction establishes an acquisition fair value basis for the company being acquired.The two companies may be about the same size and it is difficult to determine the acquired company and the acquiring company.The transaction may be considered to be the uniting of the ownership interests of the companies involved.The acquired subsidiary must be smaller in size than the acquiring parent.Question 24 / 4 pts(TCO 2) According to SFAS No. 141 the pooling of interest method for business combinationsis preferred to the purchase method.is allowed for all new acquisitions.is no longer allowed for business combinations after June 30 2001.is no longer allowed for business combinations after December 31 2001.is only allowed for large corporate mergers such as Exxon and Mobil.Question 30 / 4 pts(TCO 2) Which of the following is a characteristic of a business combination that should be accounted for as a purchase?The transaction clearly establishes an acquisition price for the company being acquired.The two companies may be about the same size and it is difficult to determine the acquired company and the acquiring company.The transaction may be considered to be the uniting of the ownership interests of the companies involved.The acquired subsidiary must be smaller in size than the acquiring parent.Question 44 / 4 pts(TCO 2) In a transaction accounted for using the purchase method where cost exceeds book value which statement is true for the acquiring company with regard to its investment?Net assets of the acquired company are revalued to their fair values and any excess of cost over fair value is allocated to goodwill.Net assets of the acquired company are maintained at book value and any excess of cost over book value is allocated to goodwill.Assets are revalued to their fair values. Liabilities are maintained at book values. Any excess is allocated to goodwill.Long-term assets are revalued to their fair values. Any excess is allocated to goodwill.Question 54 / 4 pts(TCO 2) Plenty Corp. paid $300 000 for the outstanding common stock of Shirley Co. At that time Shirley had the following condensed balance sheet.(Carrying amounts)Current assets: $40 000Plant and equipment net: $380 000Liabilities: $200 000Stockholders’ equity: $220 000The fair value of the plant and equipment was $60 000 more than its recorded carrying amount. The fair values and carrying amounts were equal for all other assets and liabilities. Which amount of goodwill related to Shirley’s acquisition should Plenty report in its consolidated balance sheet?$20 000$40 000$60 000$80 000ACCT405 Week 3 Quiz Latest 2017 OctoberQuestion 14 / 4 pts(TCO 2) Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination?Initial value or book valueInitial value lower of cost or market value or equityInitial value equity or partial equityInitial value equity or book valueInitial value lower of cost or market value or partial equityQuestion 20 / 4 pts(TCO 3) One company acquires another company in a combination that is accounted for as an acquisition. The acquiring company decides to apply the initial value method in accounting for the combination. Which is one reason the acquiring company might have made this decision?It is the only method allowed by the SEC.It is relatively easy to apply.It is the only internal reporting method allowed by generally accepted accounting principles.Operating results on the parent’s financial records reflect consolidated totals.When the initial method is used no worksheet entries are required in the consolidation process.Question 34 / 4 pts(TCO 3) Which of the following accounts would not appear on the consolidated financial statements at the end of the first fiscal period of the combination?GoodwillEquipmentInvestment in subsidiaryCommon stockAdditional paid-in capitalQuestion 40 / 4 pts(TCO 3) Parent Corp. bought 100% of Jack Inc. on January 1 20×1 at a price in excess of the subsidiary’s fair value. On that date Parent’s equipment (10-year life) had a book value of $360 000 but a fair value of $480 000. Jack had equipment (10-year life) with a book value of $240 000 and a fair value of $350 000. Parent used the partial equity method to record its investment in Jack. On December 31 20×3 Parent had equipment with a book value of $250 000 and a fair value of $400 000. Jack had equipment with a book value of $170 000 and a fair value of $320 000. Which is the consolidated balance for the equipment account as of December 31 20×3?$710 000$580 000$474 000$497 000$565 000Question 50 / 4 pts(TCO 3) On September 1 20×1 Peter Inc. issued common stock in exchange for 20% of Sal Inc.’s outstanding common stock. In July of 20×3 Peter issued common stock for an additional 75% of Sal’s outstanding common stock. Sal continues in existence as Peter’s subsidiary. How much of Sal’s 20×3 net income should be reported as accruing to Peter?20% of Sal’s net income to June 30 and all of Sal’s net income from July 1 to December 3120% of Sal’s net income to June 30 and 95% of Sal’s net income from July 1 to December 3195% of Sal’s net incomeAll of Sal’s net incomeACCT405 Week 5 Quiz Latest 2017 OctoberQuestion 10 / 4 pts(TCO 3) Parent sold land to its subsidiary for a gain in 20×1. The subsidiary sold the land externally for a gain in 20×3. Which of the following statements is true?A gain will be reported on the consolidated income statement in 20×1.A gain will be reported on the consolidated income statement in 20×3.No gain will be reported on the 20×3 consolidated income statement.Only the parent company will report a gain in 20×3.The subsidiary will report a gain in 20×1.Question 24 / 4 pts(TCO 3) During 20×1 Vonsamek Co. sold inventory to its wholly owned subsidiary Link Co. The inventory cost $30 000 and was sold to Link for $44 000. From the perspective of the combination when is the $14 000 gain realized?When the goods are sold to a third party by LinkWhen Link pays Vonsamek for the goodsWhen Vonsamek sold the goods to LinkWhen the goods are used by LinkQuestion 34 / 4 pts(TCO 3) Pop Co. owns 80% of Cool Co. common stock par value $10. On January 1 20×1 Cool Co. issued 10 000 additional shares of common stock for $35 per share. Pop Co. acquired 8 000 of these shares. How would this transaction affect the additional paid-in capital of the parent company?Increase it by $28 700Increase it by $200 000$0Increase it by $280 000Increase it by $250 000Question 44 / 4 pts(TCO 3) Where do dividends paid to the noncontrolling interest of a subsidiary appear on a consolidated statement of cash flows?Cash flows from operating activitiesCash flows from investing activitiesCash flows from financing activitiesSupplemental schedule of noncash investing and financing activitiesNot on the consolidated statement of cash flowsQuestion 54 / 4 pts(TCO 3) During 20×1 Play Inc. acquired 100% of Stray Inc. by issuing 250 000 shares of its common stock. The acquisition was announced on March 31 20×1 when Play’s common stock was selling for $45 per share and finalized on October 15 20×1 when the market price of Play’s common stock was $50 per share. On October 15 20×1 Stray’s net assets had a book value of $10 750 000. Book value equaled fair value for all recognized assets and liabilities except land which had a fair value $500 000 higher than book value. Stray also had unpatented technology with a fair value of $225 000 and in-process research and development with a fair value of $365 000. Which is the goodwill to be reported on Play Inc.’s December 31 20×1 balance sheet under U.S. GAAP?a. $500 000$660 000$1 250 000$1 750 000ACCT405 Week 6 Quiz Latest 2017 OctoberQuestion 14 / 4 pts(TCO 4) A U.S. company sells merchandise to a foreign company denominated in U.S. dollars. Which of the following statements is true?If the foreign currency appreciates a foreign exchange gain will result.If the foreign currency depreciates a foreign exchange gain will result.No foreign exchange gain or loss will result.If the foreign currency appreciates a foreign exchange loss will result.If the foreign currency depreciates a foreign exchange loss will result.Question 24 / 4 pts(TCO 4) Which of the following translation methods was originally mandated by SFAS No. 8?Current/noncurrent methodMonetary/nonmonetary methodCurrent rate methodTemporal methodIndirect methodQuestion 34 / 4 pts(TCO 4) Which is a company’s functional currency?The currency of the primary economic environment in which it operatesThe currency of the country where it has its headquartersThe currency in which it prepares its financial statementsThe reporting currency of its parent for a subsidiaryThe currency it chooses to designate as suchQuestion 44 / 4 pts(TCO 4) According to SFAS 52 which method is usually required for translating a foreign subsidiary’s financial statements into the parent’s reporting currency?The temporal methodThe current rate methodThe current/noncurrent methodThe monetary/nonmonetary methodThe noncurrent rate methodQuestion 54 / 4 pts(TCO 4) Freddy Co. a U.S. company contracted to purchase foreign goods. Payment in foreign currency was due 1 month after the goods were received at Freddy’s warehouse. Between the receipt of goods and the time of payment the exchange rates changed in Freddy’s favor. The resulting gain should be included in Freddy’s financial statements as a(n)component of income from continuing operations.extraordinary item.deferred credit.separate component of other comprehensive income.ACCT405 Week 7 Quiz Latest 2017 OctoberQuestion 14 / 4 pts(TCO 5) The disadvantages of the partnership form of business organization compared to corporations includethe legal requirements for formation.unlimited liability for the partners.the requirement for the partnership to pay income taxes.the extent of governmental regulation.the complexity of operations.Question 24 / 4 pts(TCO 2) Which of the following is not a characteristic of a partnership?The partnership itself pays no income taxes.It is easy to form a partnership.Any partner can be held personally liable for all debts of the business.A partnership requires written articles of partnership.Each partner has the power to obligate the partnership for liabilities.Question 34 / 4 pts(TCO 5) The partnership of Charley Sammy and Tommy was insolvent and will be unable to pay $30 000 in liabilities currently due. Which recourse was available to the partnership’s creditors?They must present equal claims to the three partners as individuals.They must try obtaining a payment from the partner with the largest capital account balance.They cannot seek remuneration from the partners as individuals.They may seek remuneration from any partner they choose.They must present their claims to the three partners in the order of the partners’ capital account balances.Question 40 / 4 pts(TCO 5) The partnership contract for Hal and Jan LLP provides that Hal is to receive a bonus of 20% of net income and that the remaining net income is to be divided equally. If the partnership income before the bonus for the year is $57 600 Hal’s share of this prebonus income is$28 800.$33 600.$34 560.$43 200.$57 600.Question 54 / 4 pts(TCO 5) Roger and Wolger formed a partnership in the Year 20×1. The partnership agreement provides for annual salary allowances of $55 000 for Roger and $45 000 for Wolger. The partners share profits equally and losses in a 60/40 ratio. The partnership had earnings of $80 000 for Year 20×2 before any allowance to partners. Which amount of these earnings should be credited to each partner’s capital account?Roger Wolger$40 000 $40 000Roger Wolger$43 000 $37 000Roger Wolger$44 000 $36 000Roger Wolger$45 000 $35 000
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.