1. (TCO 1) Wathan Inc. sold $180,000 in inventory to Miller Co. during 2008, for $270,000. Miller resold $108,000 of this merchandise in 2008 with the remainder to be disposed of during 2009. Required: Assuming Wathan owns 25% of Miller and applies the equity method, prepare the journal entry Walthan should have recorded at the end of 2008 to defer the unrealized inter-company inventory profit? Show all of your work to arrive at the amount in your journal entry. Showing only the answer will result in zero points. (Points : 15)

Question 2.2. (TCO 2) How are direct combination costs accounted for in an acquisition transaction? (Points : 15)

Question 3.3. (TCO 3) On January 1, 2009, Elva Corp. paid $750,000 for 80% of Fenton Co. when the book value of Fenton's net assets was $800,000. Fenton owned a building with a fair value of $150,000 and a book value of $120,000. Required: At what amount would the building appear on a consolidated balance sheet prepared immediately after the combination, assuming Elva used the acquisition method? Show all of your work. Showing only the answer will result in zero points. (Points : 15)

Question 4.4. (TCO 4) A foreign subsidiary of a U.S. corporation purchased equipment on January 4, 2005. (A.) How would depreciation expense on the equipment be translated for 2008? (B.) How would depreciation expense on the equipment be re-measured for 2008? (Points : 15)

Question 5.5. (TCO 5) Why are the terms of the Articles of Partnership important to partners? (Points : 15)