The data in the Option 1 Spreadsheet(linked at the bottom of the page) contains a set of 10 multiple-choice questions. Each question is presented on a separate worksheet within the workbook. To receive credit for each answer, you must show how you arrived at your answer.

Requirements:

Complete all work on the spreadsheet attached to this assignment. It will be your only deliverable.

Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single MS Excel file for grading.

Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 A 100% asset acquisition of Sub Company by Parent Company (using cash and a bond issue) would most likely Question 1: require which of the following? Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 a) Minority Interest b) CR - Inventory $105,000 c) CR - Common Stock $100,000 d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 A 100% stock acquisition of Sub Company by Parent Company (via Parent Stock Issues) would require which of the Question 3: following? Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value Fair Value $40,000 $40,000 $15,000 $10,000 $105,000 $200,000 $60,000 $100,000 $400,000 $300,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 a) DR - Investment in Sub Company b) CR - Investment in Sub Company c) DR - Common Stock d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 If the 100% stock acquisition of Sub Company by Parent Company was a bargain purchase, what was the purchase Question 3: price of Sub Company? Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 a) $650,000 b) $600,000 c) $550,000 d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 If the 100% stock acquisition of Sub Company by Parent Company was a bargain purchase, which of Question 4: the following accounts are most likely to appear in a related journal entry? Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 a) Goodwill b) Gain c) Bargain Purchase d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Question 5: Book Value $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $480,000 $50,000 $100,000 $60,000 $270,000 $480,000 Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $650,000 $50,000 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 Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Question 6: Book Value $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $480,000 $50,000 $100,000 $60,000 $270,000 $480,000 Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $650,000 $50,000 What type of business combination would result from Parent Company acquiring Sub Company to form Super-Parent Company? a) Statutory Merger b) Statutory Consolidation c) Stock Acquisition d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Question 7: Book Value $40,000 $15,000 $105,000 $60,000 $400,000 -$150,000 $10,000 $480,000 $50,000 $100,000 $60,000 $270,000 $480,000 Fair Value $40,000 $10,000 $200,000 $100,000 $300,000 $650,000 $50,000 Sub Company was a former business activity segment of Parent Company. Parent Company shares were exchanged for Sub Company shares. This can best be described as which of the following? a) External Expansion b) Internal Expansion c) Statutory Merger d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Question 8: Book Value Fair Value $40,000 $40,000 $15,000 $10,000 $105,000 $200,000 $60,000 $100,000 $400,000 $300,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 Sub Company was a former business activity segment of Parent Company. Sub Company shares were issued to Parent Company shareholders. This can best be described as which of the following? a) External Expansion b) Internal Expansion c) Statutory Merger d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Question 9: Book Value Fair Value $40,000 $40,000 $15,000 $10,000 $105,000 $200,000 $60,000 $100,000 $400,000 $300,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 Parent Company acquired 10% interest in Sub Company. Which of the following describes the ownership interest of Parent Companyover Sub Company? a) Control b) Significant Influence c) Insignificant Interest d) None of the above Answer: Explanation of answer is written below Parent Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Book Value $250,000 $30,000 $150,000 $100,000 $600,000 -$150,000 $980,000 $20,000 $100,000 $560,000 $300,000 $980,000 Sub Company Balance Sheet Assets, Liabilities & Equities Cash AR Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets AP Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity Question 10: Book Value Fair Value $40,000 $40,000 $15,000 $10,000 $105,000 $200,000 $60,000 $100,000 $400,000 $300,000 -$150,000 $10,000 $480,000 $650,000 $50,000 $50,000 $100,000 $60,000 $270,000 $480,000 Parent Company acquired 30% interest in Sub Company. Which of the following describes the ownership interest of Parent Companyover Sub Company? a) Control b) Significant Influence c) Insignificant Interest d) None of the above Answer: Explanation of answer is written below