1.Indicate the parent's treatment of any preexisting Goodwill on the newly acquired subsidiary's books.

2.Indicate the accounting treatment for acquired In-Process Research and Development (IPR& D)

3.Describe the two criteria for recognizing intangible assets apart from goodwill in a business combination.

4.Accounting for Contingent Consideration in Business Combinations

5.Raphael Company paid $2,000,000 for the net assets of Paris Corporation and Paris was then dissolved. Paris had no liabilities. The fair values of Paris' assets were $2,500,000. Paris's only non-current assets were land and equipment with fair values of $160,000 and $640,000, respectively. At what value will the equipment be recorded by Raphael?

a.$640,000

b.$240,000

c.$400,000

d.$0

6.In an asset acquisition:

a.A consolidation must be prepared whenever financial statements are issued.

b.The acquiring company deals only with existing shareholders, not the company itself.

c.The assets and liabilities are recorded by the acquiring company at their book values.

d.Statements for the single combined entity are produced automatically and no consolidation process is needed.

7.In the consolidated income statement of A Corporation and its 85% owned B subsidiary, the noncontrolling interest share was reported at $45,000.Assume the book value and fair value of B's net assets were equal at the acquisition date. What amount of net income did B have for the year?

a.$52,941

b.$38,250

c.$235,000

d.$300,000

8.Which of the following should appear in consolidated financial statements?

a.All intercompany transactions properly recorded on each affiliate's books.

b.Transactions between the consolidated company and outside parties.

c.Transactions not accounted for by the simple equity method.

d.Lease transactions between a parent and subsidiary.

9.On January 1, 2019, Rosy International purchased 90% of Green Corporation's outstanding shares for $135,000 when the fair value of Green's net assets were equal to the book values.The balance sheets of Rosy and Green Corporations at year-end 2018 are summarized as follows:

RosyGreen

Assets$590,000$180,000

Liabilities$70,000$30,000

Capital stock360,00090,000

Retained earnings160,00060,000

If a consolidated balance sheet was prepared immediately after the business combination, the noncontrolling interest would be

a.$9,000.

b.$13,500.

c.$15,000.

d.$16,667.

10.ABC Co. is acquiring XYZ Inc. XYZ has the following intangible assets:

Patent on a product that is deemed to have no useful life $10,000.

Customer list with an observable fair value of $50,000.

A 5-year operating lease with favorable terms having a discounted present value of $8,000.

Identifiable research and development costs of $100,000.

ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc?

a.$168,000

b.$58,000

c.$158,000

d.$150,000

11.On July 1, 2019, Renaldo Incorporated paid cash for 21,000 shares of Henderson Company's $10 par value stock, when it was trading at $22 per share.At that time, Henderson's total stockholders' equity was $597,000, and they had 30,000 shares of stock outstanding, both before and after the purchase.The book value of Henderson's net assets is believed to approximate the fair values.

Requirement 1:Prepare the journal entry that Renaldo would record at the date of acquisition on their general ledger.

Requirement 2:Calculate the balance of the goodwill that would be recorded on Renaldo's general ledger, on Henderson's general ledger, and in the consolidated financial statements.