2010 Scarpe Corporation ALL RIGHTS RESERVED (US. PAT NO. 2 Till INTTTTTTTTTTTTTTTTT 13. As shown above, Stonebriar's Property, Plant, and Equipment (PPE) had a book value of $900,000 and a fam value or 1,000,000 on the date of acquisition. What is the amount of increase in the value of Stonebriars PPE, if any, that should be recorded in the Determination and Distribution Schedule? a. $0, the value of Stonebriar's PPE should not be increased. 0. 30,000 the non-controlling interest's share of the difference between the fair value and book value of Stonebriar's PPE. $100,000, the total difference between the fair value and book value of Stonebriar's PPE. $70,000, Pinehollow's share of the difference between the fair value and book value of Stonebriar's PPE. 012) -FEED THIS DIRECTION 14. As shown above, the book value of Pinehollow's Property, plant, and Equipment (PPE) is $1,850,000. Assume that the fair value of Pinehollow's PPE was $2,000,000. What is the amount of PPE that should be shown on the consolidated balance sheet right after the acquisition of Stonebriar? a. $2,850,000 b. $2,750,000 C. $2,900,000 d. $3,000,000 e. None of these values is correct. 15. What is the value of the Non-Controlling Interest (NCI) that should be shown on the consolidated balance sheet right after Pinehollow acquires Stonebriar? a. $360,000 b. $390,000 c. $420,000 d. Some other value. [End of Four Items] 16. Which of the following is true regarding methods of accounting for the investment in the subsidiary? a. Under the simple equity method, the balance of the investment account is always equal to the original cost of the investment on the date of acquisition. b. Under the cost method, the parent records its share of the subsidiary's dividends as dividend income. 17. When consolidating financial statements in the years following the acquisition of the subsidiary a. All consolidation entries are exactly the same under the cost and equity methods. b. A new determination and distribution schedule is prepared every year. C. The balances in the "Investment in Subsidiary" and "Retained Earnings - Suosiary to be date-aligned as of the beginning of the current year. d. Consolidation entries are posted to the parent's books but not to the subsidiary s books. Use the following information for the next 11 items 0.0 On January 1, 2016, Paris Company acquired 80% of the voting common stock of Sun Co. for $600,000 cash. The two companies had the following balance sheets on date of acquisition (Book values). Sun $175.000 5300 Current Assets Equipment (Net) Total Assets Current Liabilities Common Stock Additional Paid-in Capital Retained Earnings Total Liabilities and Equity Paris $700,000 1,520,000 2,220,000 $500,000 100,000 900,000 720,000 2,220,000 550.000 725,000 120,000 80,000 300,000 225,000 725,000 On the date of acquisition, the fair values of Sun's assets and liabilities were equal to their book values except for equipment which had a fair value of $650,000. The equipment had a remaining useful life of 10 years and no salvage value. Any remaining excess is goodwill. Sun Paris and Sun had the following information for 2016 and 2017. Paris 2016 Net Income (Internally Generated) $170,000 Dividends 30,000 2017 Net Income (Internally Generated) 200,000 Dividends 23,000 $60,000 12,000 50,000 14,000 19. IIIIIIII Assume that Paris uses the simple equity method to account for its investment in Sun. What is the same of Investment in Subsidiary-Sun" at the end of 2016 in Paris books? a. $648,000 b. $638,400 c. $590,400 d. $609,600 e. $600,000 ALLOTS ROMEOPATNO I 20. Assume that Paris uses the cost method to account for its investment in Sun. What is the balance of "Investment in Subsidiary-Sun" at the end of 2016 in Paris books? a. $600,000 b. $648,000 C. $638,400 d. $609,600 e. $590,400 21. Assume that Paris uses the simple equity method to account for its investment in Sun. Which of the following entries is required to "date align" the balance of the "Investment in Subsidiary account in the 2016 consolidation worksheet? a. Debit Subsidiary Income - Sun SXXX, Credit Investment in Sun $XXX b. Debit Investment in Sun $XXX, Credit Dividends Declared C. Debit Investment in Sun $XXX, Credit Subsidiary Income - Sun $XXX d. Debit Dividends Receivable $XXX, Credit Investment in Sun $XXX e. Both a and b. 22. Assume that Paris uses the cost method to account for its investment in Sun. Which of the following entries is required to "date align" the balance of the "Investment in Subsidiary account in the 2016 consolidation worksheet (end of first year after acquisition)? a. Debit Investment in Sun $XXX, Credit Retained Earnings - Paris $XXX b. Debit Investment in Sun $XXX, Credit Retained Earnings - Sun $XXX C. No entry is required. d. Debit Retained Earnings - Paris $XXX, Credit Investment in Sun $XXX e. Debit Retained Earnings - Sun $XXX, Credit Investment in Sun $XXX 2010 Scarpe Corporation ALL RIGHTS RESERVED (US. PAT NO. 2 Till INTTTTTTTTTTTTTTTTT 13. As shown above, Stonebriar's Property, Plant, and Equipment (PPE) had a book value of $900,000 and a fam value or 1,000,000 on the date of acquisition. What is the amount of increase in the value of Stonebriars PPE, if any, that should be recorded in the Determination and Distribution Schedule? a. $0, the value of Stonebriar's PPE should not be increased. 0. 30,000 the non-controlling interest's share of the difference between the fair value and book value of Stonebriar's PPE. $100,000, the total difference between the fair value and book value of Stonebriar's PPE. $70,000, Pinehollow's share of the difference between the fair value and book value of Stonebriar's PPE. 012) -FEED THIS DIRECTION 14. As shown above, the book value of Pinehollow's Property, plant, and Equipment (PPE) is $1,850,000. Assume that the fair value of Pinehollow's PPE was $2,000,000. What is the amount of PPE that should be shown on the consolidated balance sheet right after the acquisition of Stonebriar? a. $2,850,000 b. $2,750,000 C. $2,900,000 d. $3,000,000 e. None of these values is correct. 15. What is the value of the Non-Controlling Interest (NCI) that should be shown on the consolidated balance sheet right after Pinehollow acquires Stonebriar? a. $360,000 b. $390,000 c. $420,000 d. Some other value. [End of Four Items] 16. Which of the following is true regarding methods of accounting for the investment in the subsidiary? a. Under the simple equity method, the balance of the investment account is always equal to the original cost of the investment on the date of acquisition. b. Under the cost method, the parent records its share of the subsidiary's dividends as dividend income. 17. When consolidating financial statements in the years following the acquisition of the subsidiary a. All consolidation entries are exactly the same under the cost and equity methods. b. A new determination and distribution schedule is prepared every year. C. The balances in the "Investment in Subsidiary" and "Retained Earnings - Suosiary to be date-aligned as of the beginning of the current year. d. Consolidation entries are posted to the parent's books but not to the subsidiary s books. Use the following information for the next 11 items 0.0 On January 1, 2016, Paris Company acquired 80% of the voting common stock of Sun Co. for $600,000 cash. The two companies had the following balance sheets on date of acquisition (Book values). Sun $175.000 5300 Current Assets Equipment (Net) Total Assets Current Liabilities Common Stock Additional Paid-in Capital Retained Earnings Total Liabilities and Equity Paris $700,000 1,520,000 2,220,000 $500,000 100,000 900,000 720,000 2,220,000 550.000 725,000 120,000 80,000 300,000 225,000 725,000 On the date of acquisition, the fair values of Sun's assets and liabilities were equal to their book values except for equipment which had a fair value of $650,000. The equipment had a remaining useful life of 10 years and no salvage value. Any remaining excess is goodwill. Sun Paris and Sun had the following information for 2016 and 2017. Paris 2016 Net Income (Internally Generated) $170,000 Dividends 30,000 2017 Net Income (Internally Generated) 200,000 Dividends 23,000 $60,000 12,000 50,000 14,000 19. IIIIIIII Assume that Paris uses the simple equity method to account for its investment in Sun. What is the same of Investment in Subsidiary-Sun" at the end of 2016 in Paris books? a. $648,000 b. $638,400 c. $590,400 d. $609,600 e. $600,000 ALLOTS ROMEOPATNO I 20. Assume that Paris uses the cost method to account for its investment in Sun. What is the balance of "Investment in Subsidiary-Sun" at the end of 2016 in Paris books? a. $600,000 b. $648,000 C. $638,400 d. $609,600 e. $590,400 21. Assume that Paris uses the simple equity method to account for its investment in Sun. Which of the following entries is required to "date align" the balance of the "Investment in Subsidiary account in the 2016 consolidation worksheet? a. Debit Subsidiary Income - Sun SXXX, Credit Investment in Sun $XXX b. Debit Investment in Sun $XXX, Credit Dividends Declared C. Debit Investment in Sun $XXX, Credit Subsidiary Income - Sun $XXX d. Debit Dividends Receivable $XXX, Credit Investment in Sun $XXX e. Both a and b. 22. Assume that Paris uses the cost method to account for its investment in Sun. Which of the following entries is required to "date align" the balance of the "Investment in Subsidiary account in the 2016 consolidation worksheet (end of first year after acquisition)? a. Debit Investment in Sun $XXX, Credit Retained Earnings - Paris $XXX b. Debit Investment in Sun $XXX, Credit Retained Earnings - Sun $XXX C. No entry is required. d. Debit Retained Earnings - Paris $XXX, Credit Investment in Sun $XXX e. Debit Retained Earnings - Sun $XXX, Credit Investment in Sun $XXX