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Parent Company Balance Sheet
Assets, Liabilities & Equities	Book Value
Cash	$250,000
AR	$30,000
Inventory	$150,000
Land	$100,000
Plant and Equipment	$600,000
Less: Accumulated Depreciation	-$150,000
Total Assets	$980,000
AP	$20,000
Common Stock	$100,000
Additional Paid In Capital	$560,000
Retained Earnings	$300,000
Total Liabilities & Equity	$980,000

Sub Company Balance Sheet
Assets, Liabilities & Equities	Book Value	Fair Value
Cash	$40,000	$40,000
AR	$15,000	$10,000
Inventory	$105,000	$200,000
Land	$60,000	$100,000
Plant and Equipment	$400,000	$300,000
Less: Accumulated Depreciation	-$150,000
Goodwill	$10,000
Total Assets	$480,000	$650,000
AP	$50,000	$50,000
Common Stock	$100,000
Additional Paid In Capital	$60,000
Retained Earnings	$270,000
Total Liabilities & Equity	$480,000

Question 1:

100% asset acquisition of Sub Company by Parent Company (using cash and a bond issue) would most likely require which of the following?

a)

Minority Interest

b)

CR - Inventory $105,000

c)

CR - Common Stock $100,000

d) None of the above

Question 2

100% stock acquisition of Sub Company by Parent Company (via Parent Stock Issues) would require which of the following?

a)

DR - Investment in Sub Company

b)

CR - Investment in Sub Company

c)

DR - Common Stock

d) None of the above

Question

3:

If the 100% stock acquisition of Sub Company by Parent Company was a bargain purchase, what was the purchase price of Sub Company?

a)

$650,000

b)

$600,000

c)

$550,000

d) None of the above

Question 4:

If the 100% stock acquisition of Sub Company by Parent Company was a bargain purchase, which of the following accounts are most likely to appear in a related journal entry?

a)

Goodwill

b)

Gain

c)

Bargain Purchase

d) None of the above

Question 5:	If the 100% stock acquisition of Sub Company by Parent Company resulted in the appearance of Goodwill on the Parent balance sheet, what is the amount amount most likely paid by Parent to acquire Sub Company?
a)	$750,000
b)	$600,000
c)	$550,000
d)	None of the above