All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Hire a Tutor
AI Study Help New

Search
Sign In
Register

study help
business
modern advanced accounting

Questions and Answers of Modern Advanced Accounting

7. This sentence appears in ARB No. 51, “Consolidated Financial Statements”: “The amount of intercompany profit or loss to be eliminated . . . is not affected by the existence of a minority
6. Does a parent company’s open-market acquisition of its subsidiary’s bonds at a cost less than their carrying amount result, from a consolidated viewpoint on the date of acquisition, in:A
5. A working paper elimination (in journal entry format) for intercompany sales of merchandise generally includes a credit to:a. Intercompany Cost of Goods Sold only.b. Cost of Goods Sold only.c.
4. A subsidiary’s journal entry to record the parent company’s discounting of a note receivable from the subsidiary at a bank includes:
3. Intercompany loans, operating leases of property, and rendering of services do not include an element of intercompany profit (gain) or loss for the consolidated entity because:a. The affiliated
2. On February 28, 2005, Pylon Corporation discounted at Bank of Los Angeles at a 15%discount rate a $120,000, 60-day, 12% note receivable dated February 19, 2005, made by Sullivan Company, a wholly
1. On October 31, 2005, Sol Company, the wholly owned subsidiary of Pan Corporation, borrowed $50,000 from Pan on a 90-day, 8% promissory note. On November 30, 2005, Pan discounted the note at
16. Intercompany profits (gains) or losses in inventories, plant assets, intangible assets, or bonds result in consolidated net income that differs from the parent company’s equitymethod net
15. What accounting problems result from the reissuance by a subsidiary of parent company bonds that had been acquired in the open market by the subsidiary? Explain.
14. “No intercompany gain or loss should be recognized when a parent company acquires in the open market outstanding bonds of its subsidiary, because the transaction is not an intercompany
13. In what ways do working paper eliminations (in journal entry format) for intercompany leases of property under capital/sales-type leases resemble eliminations for intercompany sales of plant
12. Sayles Company, a 90%-owned subsidiary of Partin Corporation, sold to Partin for$10,000 a machine with a carrying amount of $8,000, no residual value, and an economic life of four years. Explain
11. Is an intercompany gain on the sale of land ever realized? Explain.
10. How do intercompany sales of plant assets and intangible assets differ from intercompany sales of merchandise?
9. Some accountants have advocated the elimination of intercompany profit in the parent company’s ending inventories only to the extent of the parent’s ownership interest in the partially owned
8. How is the minority interest in net income of a partially owned subsidiary affected by working paper eliminations for intercompany profits? Explain.
7. How is the unrealized intercompany profit in a subsidiary’s beginning inventories resulting from the parent company’s sales of merchandise to the subsidiary accounted for in a working paper
6. What consolidated financial statement categories are affected by intercompany sales of merchandise at a profit? Explain.
5. How are consolidated financial statements affected if unrealized intercompany profits(gains) resulting from transactions between a parent company and its subsidiaries are not eliminated? Explain.
4. Is an intercompany note receivable that has been discounted by a bank eliminated in the preparation of a consolidated balance sheet? Explain.
3. Primak Corporation rents a sales office to its wholly owned subsidiary under an operating lease requiring rent of $2,000 a month, payable the first day of the month. What are the income tax
2. Identify five common related party transactions between a parent company and its subsidiary.
1. How should a parent company and subsidiary account for related party transactions and balances to assure their correct elimination in the preparation of consolidated financial statements? Explain.
16. At the end of an accounting period, a parent company that uses the equity method of accounting for its partially owned subsidiary closes its:a. Dividends Declared ledger account.b. Intercompany
15. On May 31, 2005, the date of the business combination of Passey Corporation and its 80%-owned subsidiary, Sandy Company, for which Passey uses the equity method of accounting, the balance of
14. Under the equity method of accounting, a parent company uses the Retained Earnings of Subsidiary ledger account for a subsidiary:a. For closing entries only.b. For dividends declared by the
13. An Intercompany Dividends Receivable ledger account is used in:a. The cost method of accounting only.b. The equity method of accounting only.c. Both the cost method and the equity method of
12. The post-closing balances of the Retained Earnings ledger accounts of Panich Corporation and its 80%-owned subsidiary, Swenson Company, on February 28, 2006, were as follows (there were no
11. The 80%-owned subsidiary of a parent company reported a net income of $80,000 for the year ended May 31, 2006. The parent company’s appropriate journal entry under the equity method of
10. If a parent company uses the equity method of accounting, in the working paper eliminations for the second and succeeding years following a business combination between the parent company and its
9. During a fiscal year, the balance of a parent company’s Investment in Subsidiary Common Stock ledger account for a wholly owned subsidiary, for which the parent company uses the equity method of
8. On any date, the balance of a parent company’s Retained Earnings of Subsidiary account attributable to a wholly owned subsidiary is equal to the:a. Balance of the subsidiary’s Retained
7. The accuracy of the minority interest in net assets of a partially owned subsidiary subsequent to the date of the business combination may be verified by applying the minority interest percentage
6. The end-of-period closing entries for a parent company that uses the equity method of accounting for the operating results of a wholly owned subsidiary include a credit to the Retained Earnings of
5. After completion of the parent company’s equity-method journal entries for its profitable wholly owned subsidiary’s operating results, the balance of the parent’s Intercompany Investment
4. Under the equity method of accounting, dividends declared by the subsidiary to the parent company are credited to the parent’s:a. Intercompany Dividends Receivable account.b. Investment in
3. In a closing entry at the end of an accounting period, a parent company that uses the equity method of accounting for the operations of a subsidiary credits the Retained Earnings of Subsidiary
2. Under the equity method of accounting for the operating results of a subsidiary, dividends declared by the subsidiary to the parent company are accounted for by the parent company as:a. Dividend
1. Concepts underlying the equity method and the cost method of accounting for the operating results of a subsidiary may be summarized as follows:Equity Method Cost Method Legal form Economic
8. Is a Retained Earnings of Subsidiary ledger account required for a parent company that uses the equity method of accounting for the subsidiary’s operations? Explain.Select the best answer for
7. Plumstead Corporation’s 92%-owned subsidiary declared a dividend of $3 a share on its 50,000 outstanding shares of common stock. How does Plumstead record this dividend under:a. The equity
6. Both Parnell Corporation and Plankton Company have wholly owned subsidiaries. Parnell has an Intercompany Dividends Revenue ledger account, and an Intercompany Investment Income account is
5. Discuss some of the advantages that result from the use of the equity method, rather than the cost method, of accounting for a subsidiary’s operating results.
4. Strake Company, a 90%-owned subsidiary of Peale Corporation, had a net income of$50,000 for the first year following the business combination. However, the working paper elimination for the
3. Describe the special features of closing entries for a parent company that accounts for its subsidiary’s operating results by the equity method.
2. When there are no intercompany profits (gains) or losses in consolidated assets or liabilities, the equity method of accounting produces parent company net income that equals consolidated net
1. “Consolidated financial statement amounts are the same, regardless of whether a parent company uses the equity method or the cost method to account for a subsidiary’s operations.”Why is this
16. Has push-down accounting for a subsidiary’s separate financial statements been sanctioned by the:FASB? SEC?a. Yes Yesb. Yes Noc. No Yesd. No No
15. The cost of Paul Corporation’s 80% investment in Seth Company’s outstanding voting common stock was $1,200,000, and the current fair value of Seth’s identifiable net assets, which had a
14. The debits in the working paper elimination (in journal entry format) for the consolidated balance sheet of Parent Corporation and 90%-owned Subsidiary Company totaled$2,080,000, including a
13. On the date of the business combination of a parent company and its partially owned subsidiary, under the computation method used in this book, the amount assigned to minority interest in net
12. In a consolidated balance sheet of a parent company and its partially owned subsidiary, minority interest in net assets of subsidiary is displayed as a:a. Liability under the economic unit
11. In a business combination resulting in a parent company–wholly owned subsidiary relationship, goodwill developed in the working paper elimination is attributed:a. In its entirety to the
10. Differences between current fair values and carrying amounts of the identifiable net assets of a subsidiary on the date of a business combination are recognized in a:a. Working paper
9. On the date of the business combination of Pobre Corporation and its wholly owned subsidiary, Sabe Company, Pobre paid (1) $100,000 to the former stockholders of Sabe for their stockholders’
8. In the working paper for consolidated balance sheet prepared on the date of the business combination of a parent company and its wholly owned subsidiary, whose liabilities had current fair values
7. In a working paper elimination (in journal entry format) for the consolidated balance sheet of a parent company and its wholly owned subsidiary on the date of a business combination, the subtotal
6. In a completed working paper elimination (in journal entry format) for a parent company and its wholly owned subsidiary on the date of the business combination, the total of the debits generally
5. If, on the date of the business combination, C consideration given to the former stockholders of wholly owned subsidiary Stacey Company by Passey Corporation;DOP direct out-of-pocket costs of the
4. FASB Statement No. 94, “Consolidation of All Majority Owned Subsidiaries,” exempts from consolidation:a. No subsidiaries of the parent company.b. Foreign subsidiaries of the parent company.c.
3. An investor company that owns more than 50% of the outstanding voting common stock of an investee may not control the investee if:a. The investee is in reorganization in bankruptcy proceedings.b.
2. The traditional definition of control for a parent company–subsidiary relationship(parent’s ownership of more than 50% of the subsidiary’s outstanding common stock)emphasizes:a. Legal
1. A parent company’s correctly prepared journal entry to record the out-of-pocket costs of the acquisition of the subsidiary’s outstanding common stock in a business combination was as follows
10. What is push-down accounting?
9. The principal limitation of consolidated financial statements is their lack of separate information about the assets, liabilities, revenue, and expenses of the individual companies included in the
8. Compare the parent company concept and the economic unit concept of consolidated financial statements as they relate to the display of minority interest in net assets of subsidiary in a
7. Describe three methods that have been proposed for valuing minority interest and goodwill in the consolidated balance sheet of a parent company and its partially owned subsidiary.
6. Differentiate between a working paper for consolidated balance sheet and a consolidated balance sheet.
5. Are eliminations for the preparation of consolidated financial statements entered in the accounting records of the parent company or of the subsidiary? Explain.
4. In a business combination resulting in a parent–subsidiary relationship, the identifiable net assets of the subsidiary must be reflected in the consolidated balance sheet at their current fair
3. The controller of Pastor Corporation, which has just become the parent of Sexton Company in a business combination, inquires if a consolidated income statement is required for the year ended on
2. The use of consolidated financial statements for reporting to stockholders is common.Under some conditions, certain subsidiaries may be excluded from consolidation. List the conditions under which
1. Discuss the similarities and dissimilarities between consolidated financial statements for a parent company and its subsidiaries and combined financial statements for the home office and branches
8. In the balance sheet of a combined enterprise on the date of a business combination, unallocated negative goodwill is displayed:a. In stockholders’ equity.b. In a note to financial statements.c.
6. The term survivor is associated with a business combination accomplished through:a. A statutory merger.b. A statutory consolidation.c. An acquisition of common stock.d. An acquisition of assets.
5. In a “bargain purchase” business combination, the excess of the current fair value of the combinee’s identifiable net assets over the cost to the combinor is:a. Credited to the combinor’s
3. A target company’s defense against an unfriendly takeover that involves the disposal of one or more profitable business segments of the target is termed:a. Pac-man defenseb. Scorched earthc.
2. The cost of a combinee in a business combination includes all the following except:a. Legal fees and finder’s fee.b. Cost of registering and issuing debt securities issued to effect the
10. What combinee intangible assets other than goodwill are to be given accounting recognition in a business combination?
9. Define the term preacquisition contingencies.
8. How is the total cost of a combinee allocated in a business combination?
7. Define contingent consideration in a business combination.
6. Goodwill often is recognized in business combinations. Explain the meaning of goodwill and negative goodwill.
5. State how each of the following out-of-pocket costs of a merger business combination is accounted for by the combinor:a. Printing costs for proxy statement mailed to combinor’s stockholders in
4. How is the combinor in a business combination determined?
3. Identify two methods that may be used, individually or jointly, to determine an appropriate price to pay for a combinee in a business combination.
2. Differentiate between a statutory merger and a statutory consolidation.
1. Define business combination.
Hartman, Inc., established Reno Branch on January 2, 2005. During 2005, Hartman’s home office shipped merchandise to Reno Branch that cost $300,000. Billings were made at prices marked up 20% above
Langley, Inc., operates a number of branches as well as a home office. Each branch stocks a complete line of merchandise obtained almost entirely from the home office. The branches also handle their
The management of Windsor Company, which has several branches as well as a home office, is planning to sell the net assets of Southwark Branch to an unrelated business enterprise.As controller of
Kevin Carter, CPA, a member of the IMA, the FEI, and the AICPA (see Chapter 1), is the newly hired controller of Oilers, Inc., a closely held manufacturer of replacement parts for oil well drilling
The management of Longo Company, which has a June 30 fiscal year and sells merchandise at its home office and six branches, is considering closing Santee Branch because of its declining sales volume
On May 31, 2005, the unadjusted balances of the Investment in Troy Branch ledger account of the home office of Argos Company and the Home Office account of the Troy Branch of Argos Company were
The home office of Gomez Company bills its only branch at a markup of 25% above home office cost for all merchandise shipped to that Perez Branch. Both the home office and the branch use the periodic
On January 31, 2005, the unadjusted credit balance of the Allowance for Overvaluation of Inventories: Vermont Avenue Branch of the home office of Searl Company was $80,000.The branch reported a net
The home office of Glendale Company, which uses the perpetual inventory system, bills shipments of merchandise to the Montrose Branch at a markup of 25% on the billed price. On August 31, 2005, the
Tillman Textile Company has a single branch in Toledo. On March 1, 2005, the home office accounting records included an Allowance for Overvaluation of Inventories: Toledo Branch ledger account with a
On May 31, 2005, Portland Street Branch (the only branch) of Trapp Company reported a net income of $80,000 for May 2005, and a $240,000 ending inventory at billed price of merchandise received from
The home office of Figueroa Company ships merchandise to the Nine-Zero Branch at a billed price that includes a markup on home office cost of 25%. The Inventories ledger account of the branch, under

Showing 300 - 400 of 4775

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved