If the U S dollar is the currency in which the foreign affiliate's books and records are maintained, and the U S dollar is also the functional currency, either translation or remeasurement could be used for restatement no restatement is required the remeasurement method should be used for restatement the translation method should be used for restatement QUESTION 2 Paris, Inc holds 100 percent of the common stock of Stockholm Company, an investment acquired for $520,000 Immediately following the combination, Paris's net assets have a book value of $900,000 and a fair value of $1,050,000 The book and fair value of Stockholm's net assets on the date of combination are $350,000 and $425,000, respectively Immediately following the combination, a consolidated balance sheet is prepared Based on the information given above, what will be the amount of net assets reported in the consolidated balance sheet $1,420,000 $1,325,000 $900,000 $1,250,000 QUESTION 3 The fair value of net identifiable assets of a reporting unit of X Company is $300,000 On X Company's books, the carrying value of this reporting unit's net assets is $350,000, which includes $60,000 of goodwill If the fair value of the reporting unit as a whole is $335,000, what amount of goodwill impairment will be recognized for this unit $0 $25,000 $15,000 $35,000 QUESTION 4 All of the following are examples of how a parent company may lose control over a subsidiary and discontinue future consolidation, except The parent sells some of its interest in the subsidiary The subsidiary comes under the control of the government or other regulator The subsidiary issues a stock dividend or a stock split The subsidiary issues additional common stock QUESTION 5 Pail, Inc holds 100 percent of the common stock of Shovel Company, an investment acquired for $680,000 Immediately following the combination, Pail's net assets have a book value of $1,150,000 and a fair value of $1,390,000 The book value and the fair value of Shovel's net assets on the date of combination are $400,000 and $550,000, respectively Immediately following the combination, a consolidated balance sheet is prepared Based on the information given above, at what amount will Pail's investment in Shovel stock be reported in the consolidated balance sheet $400,000 $440,000 $0 $480,000 3 points QUESTION 6 A parent sold land to its partially owned subsidiary during the year at a loss The subsidiary continues to hold the land at the end of the year The amount to be reported as consolidated net income for the year should equal the parent's separate operating income, plus the intercompany loss, plus the subsidiary's net income the parent's separate operating income, plus the intercompany loss the parent's separate operating income, minus the intercompany loss, plus the subsidiary's net income the parent's separate operating income, minus the intercompany loss QUESTION 7 Parent Co purchases 100 percent of Son Company on January 1, 20X1, when Parent's retained earnings balance is $520,000 and Son's is $150,000 During 20X1, Son reports $15,000 of net income and declares $6,000 of dividends Parent reports $105,000 of separate operating earnings plus $15,000 of equity method income from its 100 percent interest in Son Parent declares dividends of $40,000 Based on the preceding information, what is the consolidated retained earnings balance on December 31, 20X1 $585,000 $759,000 $470,000 $600,000 QUESTION 8 Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo Company Esstwo owns 100 percent of Company Essthree Consolidated financial statements should be prepared to report the financial status and results of operations for Pea plus Essone plus Esstwo Pea plus Essone plus Esstwo plus Essthree Pea plus Essone Pea QUESTION 9 Pat Corporation acquired 80 percent of Smack Corporation's voting common stock on January 1, 20X7 On December 31, 20X8, Pat received $390,000 from Smack for equipment Pat had purchased on January 1, 20X5, for $400,000 The equipment is expected to have a 10 year useful life and no salvage value Both companies depreciate equipment on a straight line basis Based on the preceding information, in the preparation of consolidation entries related to the equipment transfer for the 20X9 consolidated financial statements, the net effect on accumulated depreciation will be an increase of $135,00 an increase of $160,000 a decrease of $160,000 a decrease of $135,000 QUESTION 10 Which of the following accounts is not maintained for each partner in its accounting records Earnings account Capital account Drawing account Loan account QUESTION 11 Wakefield Company uses a perpetual inventory system In August, it sold 2,000 units from its LIFO base inventory, which had originally cost $35 per unit The replacement cost is expected to be $45 per unit The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31, the end of its fiscal year The company replaced 1,500 units in November at an actual cost of $50 per unit Assume that the replacement did not happen in November In December, the company decided not to replace any of the 1,500 units The entry required on December 31 to eliminate valuation accounts related to the inventory that will not be replaced will include a credit to Cost of Goods Sold for $15,000 a debit to Inventory for $15,000 a debit to Excess of Replacement Cost over LIFO Cost of Inventory Liquidation for $22,500 a debit to Inventory for $70,000 QUESTION 12 In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3 1 ratio, respectively They decide to admit David to the partnership Each of the following questions is independent of the others Refer to the information provided above What amount will David have to invest to give him one fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded $50,000 $45,000 $60,000 $36,000 QUESTION 13 Wakefield Company uses a perpetual inventory system In August, it sold 2,000 units from its LIFO base inventory, which had originally cost $35 per unit The replacement cost is expected to be $45 per unit The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31, the end of its fiscal year The company replaced 1,500 units in November at an actual cost of $50 per unit Based on the preceding information, in the entry to record the replacement of the 1,500 units in November, Inventory will be debited for $67,500 $52,500 $60,000 $75,000 QUESTION 14 When the old partners receive a bonus upon admission of a new partner into a partnership, the bonus is allocated to I all the partners in their profit and loss sharing ratio II the existing partners in their profit and loss sharing ratio Either I or IIII onlyNeither I nor III only QUESTION 15 ASC 280 uses a(n) approach to the definition of segments line of business portfolio entity management QUESTION 16 Which of the following accounts could be found in the PQ partnership's general ledger I Due from P II P, Drawing III Loan Payable to Q I, III, IIII, II, and IIIII, III QUESTION 17 Which of the following covers new or revised administrative practices and interpretations used by the SEC staff in reviewing financial statements Staff Accounting Bulletins Exchange Act industry guides Accounting and Auditing Enforcement Releases Securities Exchange Act releases QUESTION 18 The JKL partnership liquidated its business in 20X9 Due to an expected long liquidation period, a cash distribution plan was developed The initial sale and realization of cash from noncash assets resulted in partner K properly getting $24,000 No other partners received cash along with K Based upon this information, which of the following statements is correct I K's loss absorption potential (LAP) was higher than J's LAP and L's LAP II K's capital balance was substantially larger than the balances of J and L Neither I nor III only II only Either I or II QUESTION 19 Which of the following types of securities or securities transactions are exempt from the need to be registered under the Securities Act of 1933 I Commercial paper with a maturity of nine months or less II Intrastate issues in which the securities are offered and sold only within one state III Municipal bonds IIIIII, II, and IIII and II QUESTION 20 Regulation S X presents the rules for preparing all of the following except auditor's report footnotes financial statements management's discussion QUESTION 21 List 2 ways again on an intra entity transfer of a depreciable asset may berealized QUESTION 22 State the difference between the spot rate and the forward rate When is each used QUESTION 23 List 4 things the accountant is responsible for during the liquidation of a partnership process QUESTION 24 Paul's Plumbing acquired Smithtown Distributors on January 15, 20X8 Pansy's Flowers acquired Sam's Farm on January 1, 20X7 In the 12 31 X7 financial statements filed with the SEC, Paul's Plumbing included a Pro Forma disclosure and Pansy's Flowers did not If both acquisitions account for 100 of the common stock of the company acquired and are considered to be material, then can both filings be considered proper

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If the U.S. dollar is the currency in which the foreign affiliate's books and records are maintained, and the U.S. dollar is also the functional

If the U.S. dollar is the currency in which the foreign affiliate's books and records are maintained, and the U.S. dollar is also the functional currency,

either translation or remeasurement could be used for restatement.

no restatement is required.

the remeasurement method should be used for restatement.

the translation method should be used for restatement.

QUESTION 2

Paris, Inc. holds 100 percent of the common stock of Stockholm Company, an investment acquired for $520,000. Immediately following the combination, Paris's net assets have a book value of $900,000 and a fair value of $1,050,000. The book and fair value of Stockholm's net assets on the date of combination are $350,000 and $425,000, respectively. Immediately following the combination, a consolidated balance sheet is prepared.

Based on the information given above, what will be the amount of net assets reported in the consolidated balance sheet?

$1,420,000

$1,325,000

$900,000

$1,250,000

QUESTION 3

The fair value of net identifiable assets of a reporting unit of X Company is $300,000. On X Company's books, the carrying value of this reporting unit's net assets is $350,000, which includes $60,000 of goodwill. If the fair value of the reporting unit as a whole is $335,000, what amount of goodwill impairment will be recognized for this unit?

$25,000

$15,000

$35,000

QUESTION 4

All of the following are examples of how a parent company may lose control over a subsidiary and discontinue future consolidation, except:

The parent sells some of its interest in the subsidiary.

The subsidiary comes under the control of the government or other regulator.

The subsidiary issues a stock dividend or a stock split.

The subsidiary issues additional common stock.

QUESTION 5

Pail, Inc. holds 100 percent of the common stock of Shovel Company, an investment acquired for $680,000. Immediately following the combination, Pail's net assets have a book value of $1,150,000 and a fair value of $1,390,000. The book value and the fair value of Shovel's net assets on the date of combination are $400,000 and $550,000, respectively. Immediately following the combination, a consolidated balance sheet is prepared.

Based on the information given above, at what amount will Pail's investment in Shovel stock be reported in the consolidated balance sheet?

$400,000

$440,000

$480,000

3 points

QUESTION 6

A parent sold land to its partially owned subsidiary during the year at a loss. The subsidiary continues to hold the land at the end of the year. The amount to be reported as consolidated net income for the year should equal:

the parent's separate operating income, plus the intercompany loss, plus the subsidiary's net income.

the parent's separate operating income, plus the intercompany loss.

the parent's separate operating income, minus the intercompany loss, plus the subsidiary's net income.

the parent's separate operating income, minus the intercompany loss.

QUESTION 7

Parent Co. purchases 100 percent of Son Company on January 1, 20X1, when Parent's retained earnings balance is $520,000 and Son's is $150,000. During 20X1, Son reports $15,000 of net income and declares $6,000 of dividends. Parent reports $105,000 of separate operating earnings plus $15,000 of equity-method income from its 100 percent interest in Son; Parent declares dividends of $40,000.

Based on the preceding information, what is the consolidated retained earnings balance on December 31, 20X1?

$585,000

$759,000

$470,000

$600,000

QUESTION 8

Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo. Company Esstwo owns 100 percent of Company Essthree. Consolidated financial statements should be prepared to report the financial status and results of operations for:

Pea plus Essone plus Esstwo.

Pea plus Essone plus Esstwo plus Essthree

Pea plus Essone

Pea.

QUESTION 9

Pat Corporation acquired 80 percent of Smack Corporation's voting common stock on January 1, 20X7. On December 31, 20X8, Pat received $390,000 from Smack for equipment Pat had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis.

Based on the preceding information, in the preparation of consolidation entries related to the equipment transfer for the 20X9 consolidated financial statements, the net effect on accumulated depreciation will be:

an increase of $135,00

an increase of $160,000.

a decrease of $160,000.

a decrease of $135,000.

QUESTION 10

Which of the following accounts is not maintained for each partner in its accounting records?

Earnings account

Capital account

Drawing account

Loan account

QUESTION 11

Wakefield Company uses a perpetual inventory system. In August, it sold 2,000 units from its LIFO-base inventory, which had originally cost $35 per unit. The replacement cost is expected to be $45 per unit. The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31, the end of its fiscal year. The company replaced 1,500 units in November at an actual cost of $50 per unit.

Assume that the replacement did not happen in November. In December, the company decided not to replace any of the 1,500 units. The entry required on December 31 to eliminate valuation accounts related to the inventory that will not be replaced will include:

a credit to Cost of Goods Sold for $15,000.

a debit to Inventory for $15,000

a debit to Excess of Replacement Cost over LIFO Cost of Inventory Liquidation for $22,500.

a debit to Inventory for $70,000.

QUESTION 12

In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.

Refer to the information provided above. What amount will David have to invest to give him one-fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded?

$50,000

$45,000

$60,000

$36,000

QUESTION 13

Wakefield Company uses a perpetual inventory system. In August, it sold 2,000 units from its LIFO-base inventory, which had originally cost $35 per unit. The replacement cost is expected to be $45 per unit. The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31, the end of its fiscal year. The company replaced 1,500 units in November at an actual cost of $50 per unit.

Based on the preceding information, in the entry to record the replacement of the 1,500 units in November, Inventory will be debited for:

$67,500.

$52,500.

$60,000.

$75,000.

QUESTION 14

When the old partners receive a bonus upon admission of a new partner into a partnership, the bonus is allocated to:

I. all the partners in their profit and loss sharing ratio.
II. the existing partners in their profit and loss sharing ratio.
Either I or IIII onlyNeither I nor III only

QUESTION 15

ASC 280uses a(n) ________ approach to the definition of segments.

line of business

portfolio

entity

management

QUESTION 16

Which of the following accounts could be found in the PQ partnership's general ledger?

I. Due from P
II. P, Drawing
III. Loan Payable to Q
I, III, IIII, II, and IIIII, III

QUESTION 17

Which of the following covers new or revised administrative practices and interpretations used by the SEC staff in reviewing financial statements?

Staff Accounting Bulletins

Exchange Act industry guides

Accounting and Auditing Enforcement Releases

Securities Exchange Act releases

QUESTION 18

The JKL partnership liquidated its business in 20X9. Due to an expected long liquidation period, a cash distribution plan was developed. The initial sale and realization of cash from noncash assets resulted in partner K properly getting $24,000. No other partners received cash along with K. Based upon this information, which of the following statements is correct?
I. K's loss absorption potential (LAP) was higher than J's LAP and L's LAP.
II. K's capital balance was substantially larger than the balances of J and L.
Neither I nor III only II only Either I or II

QUESTION 19

Which of the following types of securities or securities transactions are exempt from the need to be registered under the Securities Act of 1933?

I. Commercial paper with a maturity of nine months or less.
II. Intrastate issues in which the securities are offered and sold only within one state.
III. Municipal bonds.
IIIIII, II, and IIII and II

QUESTION 20

Regulation S-X presents the rules for preparing all of the following except:

auditor's report.

footnotes.

financial statements

management's discussion.

QUESTION 21

List 2 ways again on an intra-entity transfer of a depreciable asset may berealized

QUESTION 22

State the difference between the spot rate and the forward rate.When is each used.

QUESTION 23

List 4 things the accountant is responsible for during the liquidation of a partnership process?

QUESTION 24

Paul's Plumbing acquired Smithtown Distributors on January 15, 20X8. Pansy's Flowers acquired Sam's Farm on January 1, 20X7. In the 12/31/X7 financial statements filed with the SEC, Paul's Plumbing included a Pro Forma disclosure and Pansy's Flowers did not. If both acquisitions account for 100% of the common stock of the company acquired and are considered to be material, then can both filings be considered proper?