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MULTIPLE - CHOICE ( 2 POINTS EACH ) - Clearly circle / mark the correct answer. Patrick Incorporated owns 7 0 percent of the voting

MULTIPLE-CHOICE (2 POINTS EACH)- Clearly circle/mark the correct answer.
Patrick Incorporated owns 70 percent of the voting common stock of Swayze Company. Swayze owns 60 percent of the voting common stock of Ghost Incorporated. Patrick's consolidated financial statements should include the financial information for:
a. Patrick only.
.70.60=.42,.701
(b) Patrick, Swayze, and Ghost
5
c. Patrick and Swayze.
.601
d. Swayze and Ghost.
G
When are consolidated financial statements for 2 or more legal entities required?
a. The companies are one economic entity in both legal form and substance.
b. The companies are separate entities in both legal form and substance.
c. In form, the companies are one economic entity; in substance, they are legally separate.
d. In form, the companies are legally separate; in substance, they are one economic entity.
If in substance, two legal entities are also one economic entity,
a. Only separate financial statements should be prepared.
b. Combined financial statements must be prepared
c. Consolidated financial statements must be prepared.
d. Consolidated financial statements may be prepared; it is up to management discretion.
On April 5,2023, Pod Company purchased a 60 percent interest in Seed Company for $540,000.
Seed reported net income of $168,000 for 2023 and declared and paid a dividend of $30,000.
Pod accounts for this investment by recording journal entries using the equity method.
In its December 31,2023, balance sheet, what amount should Pod report as its investment in Seed?
a. $678,000
b. $622,800
c. $406,800
d. $462,000
DRT PROBLEM I (10 POINTS)
On June 28,2023, Poison Company issued 72,000 shares of its $1 common stock for all 61,000 of Slash Incorporat $1 par common shares.
Poison's stock was selling for $31 per share immediately prior to the combination, and Slash's stock was selling fo share.
Prior to June 28, Poison incurred merger costs of $54,000 and $86,000 of costs to register and issue the new sha stock.
Following the combination, Slash operated as a subsidiary of Poison.
Required:
Prepare the required journal entry that Poison would make to record the business combination with Slash. Acquisition Expense 54000, Investmentin Slash Deferred Stock issue Costs 86000
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