1)On January 1, 2018, Pare Company acquired 75 percent of Kidd Companys common stock at an amount equal to its underlying book value Selected balance sheet data at December 31, 2018, are as follows: Pare Company Kidd Company Total Assets $420,000 $180,000 Liabilities $120,000 $ 60,000 Common Stock 100,000 50,000 Retained Earnings 200,000 70,000 In consolidated balance sheet at December 31, 2018, what amount should Pare report as common stock ?

Select one:

a. 150,000

b. 50,000

c. 137,500

d. 100,000

2)P Corporation paid $140,000 for a 70% interest in S Inc. on January 1, 2014, when S had Capital Stock of $50,000 and Retained Earnings of $100,000. Fair values of net assets were the same as recorded book values. During 2014, S had income of $40,000, declared dividends of $15,000, On December 31, 2014, the financial statements will show income from subsidiary for 2014

Select one:

a. 25,000

b. 10,500

c. 40,000

d. 28,000

5)A parent company's journal entries to record a business combination with a subsidiary always include debits and credits to recognize the assets and liabilities of the subsidiary

Select one:

True

False

7)Only the income statement is consolidated on the date of a business combination of a parent company and subsidiary

Select one:

True

False

8)All expenses paid of a business combination reduce additional paid-in capital of the Investor

Select one:

True

False