The following information pertains to the following 2 Questions.

Assume the following facts relating to an 80% owned subsidiary company:

BOY Stockholders Equity	$1,000,000
BOY unamortized AAP	125,000
Net income of subsidiary (not including AAP amortization)	210,000
AAP amortization expense	40,000
Dividends declared and paid to noncontrolling shareholders	10,000

22. What is the net income attributable to noncontrolling interests for the year?

a. $128,000

b. $136,000

c. $160,000

d. $168,000

23. What is the amount reported as noncontrolling equity at the end of the year?

a. $895,200

b. $996,000

c. $1,026,000

d. $1,028,000

24. On January 1, 2021, a Parent company has a debt outstanding that was originally issued at a discount and was purchased, on issuance, by an unaffiliated party. On July 1, 2021, a Subsidiary of the Parent purchased the debt from the unaffiliated party. The debt was purchased by the Subsidiary at a slight premium.

The Parent is a calendar year company. Which one of the following statements is true?

a. The consolidated balance sheet at December 31, 2021 will report none of the debt, and the consolidated income statement for the year ended December 31, 2021 will not report any interest expense from the debt.

b. The consolidated balance sheet at December 31, 2021 will report none of the debt, and the consolidated income statement for the year ended December 31, 2021 will report a gain or loss from the constructive retirement of the debt and will report some interest expense from the debt.

c. The consolidated balance sheet at December 31, 2021 will report none of the debt, and the consolidated income statement for the year ended December 31, 2021 will report a gain or loss from the constructive retirement of the debt and will not report any interest expense from the debt.

d. The consolidated balance sheet at December 31, 2021 will report the debt, and the consolidated income statement for the year ended December 31, 2021 will report a gain or loss from the constructive retirement of the debt and will not report any interest expense from the debt.

25. A Parent Company owns 100% of its Subsidiary. During 2020, the Parent company reports net income (by itself, without any investment income from its Subsidiary) of $800,000 and the subsidiary reports net income of $500,000. The Parent had a bond payable outstanding on July 1, 2019, with a carry value equal to $440,000. The Subsidiary acquired the bond on July 1, 2019 for $400,000. During 2020, the Parent reported interest expense (related to the bond) of $40,000 while the Subsidiary reported interest income (related to the bond) of $37,500.

What is consolidated net income for the year ended December 31, 2020?

a. $1,297,500

b. $1,300,000

c. $1,302,500

d. $1,342,500

26. There are several steps in determining whether a special purpose entity is a VIE. Which of the following is not a step in determining whether a special purpose entity is a VIE?

a. Determine whether the cash flows of the SPE are used to repay the securities holders.

b. Determine whether the company is the primary beneficiary of the VIE.

c. Determine whether the business-related scope exception applies.

d. Determine whether the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support.

e. None of the above.