Multiple Choice Questions
1. Which is the best way to measure the fair value per share of a subsidiary's noncontrolling interest?
a. The per share market value of the subsidiary's stock, in an active market, less a discount for lack of control
b. The price per share that the parent paid for the subsidiary's stock
c. The price per share that the parent paid for the subsidiary's stock, plus a premium for lack of control
d. The per share market value of the subsidiary's stock, in an active market
2. If the operating section of the consolidated statement of cash flows is displayed using the indirect method, which of the following is not an adjustment to consolidated net income?
a. Goodwill impairment loss
b. Noncontrolling interest in net income
c. Undistributed equity method income
d. Amortization expense on previously unreported identifiable intangibles
3. On the consolidated statement of cash flows, cash dividends paid to noncontrolling shareholders are
a. a cash outflow in the financing section.
b. an adjustment to income when the indirect method is used for the operating section.
c. a cash outflow in the investing section.
d. not reported.