On December 31, 2019, A Company has capital assets with a cost of $250,000 and accumulated depreciation of $150,000 and B Company has capital assets with a cost of $180,000 and accumulated depreciation of $80,000. B Company's capital assets have a fair value of $200,000 on that date. If Company A acquires Company B on January 1, 2020, and prepares a consolidated balance sheet on that date, at what values should the capital assets appear on that balance sheet (using the net method)?

Multiple Choice

• Cost of $430,000 and accumulated depreciation of $230,000.

• Cost of $450,000 and accumulated depreciation of $150,000.

• Cost of $450,000 and accumulated depreciation of $230,000.

• Cost of $680,000 and accumulated depreciation of $230,000.

Which of the following is the best approach to determine the fair value of the non-controlling interest under the fair value enterprise method?

Multiple Choice

• If a control premium is unlikely, use an implied value based on the consideration paid by the parent

• Use the market value of the outstanding subsidiary shares (not owned by the parent).

• Use a valuation model based on the subsidiary's discounted cash flows.

• Use the share price paid by the parent.

A Co. has acquired an 80% controlling interest in B Co. If using the proportionate consolidation method, the consolidated balance sheet on the date of acquisition, will contain:

Multiple Choice

• the parent's pro rata share of the assets and liabilities of the subsidiary at book value.

• 100% of the assets and liabilities of the subsidiary at fair market value.

• 100% of the assets and liabilities of the subsidiary at book value.

• the parent's pro rata share of the assets and liabilities of the subsidiary at fair market value.