Question 1

If the parent's net income reflected use of the equity method, what were the consolidated retained earnings on December 31, 2018?

Accepted Answer

The answer of If the parent's net income reflected use...

Question 2

When is a goodwill impairment loss recognized?

Accepted Answer

A)  Only after both a quantitative and qualitative assessment of the fair value of goodwill of a reporting unit. 
B)  After only definitive quantitative assessments of the fair value of goodwill is completed. 
C)  After only definitive qualitative assessments of the fair value of goodwill is completed. 
D)  If the fair value of a reporting unit falls to zero or below its original acquisition price. 
E)  Never.

Question 3

How much difference would there have been in Franel's income with regard to the effect of the investment, between using the equity method or using the initial value method of internal recordkeeping?

Accepted Answer

A)  $190,000. 
B)  $360,000. 
C)  $164,000. 
D)  $354,000. 
E)  $150,000.

Question 4

Assume the partial equity method is applied.How much equity income will Kaye report on its internal accounting records as a result of Fiore's operations?

Accepted Answer

A)  $400 
B)  $300 
C)  $380 
D)  $280 
E)  $480

Question 5

Compute the December 31, 2020, consolidated trademark.

Accepted Answer

A)  $50,000. 
B)  $46,875. 
C)  $ 0. 
D)  $34,375. 
E)  $37,500.

Question 6

Compute the December 31, 2020, consolidated total expenses.

Accepted Answer

A)  $620,000. 
B)  $280,000. 
C)  $900,000. 
D)  $909,625. 
E)  $299,625.

Question 7

What was the total for consolidated patents as of December 31, 2018?

Accepted Answer

The answer of What was the total for consolidated patents...

Question 8

When recording consideration transferred for the acquisition of Rhine on January 1, 2017, Harrison will record a contingent performance obligation in the amount of:

Accepted Answer

A)  $ 628.40 
B)  $ 2,671.60 
C)  $ 3,142.00 
D)  $13,358.00 
E)  $16,500.00

Question 9

All of the following are acceptable methods to account for a majority-owned investment in subsidiary except

Accepted Answer

A)  The equity method. 
B)  The initial value method. 
C)  The partial equity method. 
D)  The fair-value method. 
E)  Book value method.

Question 10

Consolidated net income using the equity method for an acquisition combination is computed as follows:

Accepted Answer

A)  Parent company's revenues from its own operations plus subsidiary retained earnings. 
B)  Parent's reported net income plus subsidiary dividends. 
C)  Combined revenues less combined expenses less equity in subsidiary's earnings less amortization of fair-value allocations in excess of book value. 
D)  Parent's revenues less expenses for its own operations plus the equity from subsidiary's earnings less subsidiary dividends. 
E)  None of these answer choices are correct.

Question 11

Paperless Co.acquired Sheetless Co.and in effecting this business combination, there was a cash-flow performance contingency to be paid in cash, and a market-price performance contingency to be paid in additional shares of stock.In what accounts and in what section(s) of a consolidated balance sheet are these contingent consideration items shown?

Accepted Answer

The answer of Paperless Co.acquired Sheetless Co.and in effecting this...

Question 12

What is the amount of consolidated net income for the year 2017?

Accepted Answer

A)  $3,180,000. 
B)  $3,612,000. 
C)  $3,300,000. 
D)  $3,588,000. 
E)  $3,420,000.

Question 13

Which one of the following varies between the equity, initial value, and partial equity methods of accounting for an investment?

Accepted Answer

A)  The amount of consolidated net income. 
B)  Total assets on the consolidated balance sheet. 
C)  Total liabilities on the consolidated balance sheet. 
D)  The balance in the investment account on the parent's books. 
E)  The amount of consolidated cost of goods sold.

Question 14

Compute the amount of Hurley's land that would be reported in a December 31, 2018, consolidated balance sheet.

Accepted Answer

A)  $ 900. 
B)  $1,300. 
C)  $ 400. 
D)  $1,450. 
E)  $2,200.

Question 15

If Watkins pays $450,000 in cash for Glen, what amount would be represented as the subsidiary's Equipment in a consolidation at December 31, 2019, assuming the book value of the equipment at that date is still $80,000?

Accepted Answer

A)  $70,000. 
B)  $73,500. 
C)  $75,000. 
D)  $76,500. 
E)  $80,000.

Question 16

Compute the amount of Hurley's buildings that would be reported in a December 31, 2018, consolidated balance sheet.

Accepted Answer

A)  $1,620. 
B)  $1,380. 
C)  $1,320. 
D)  $1,080. 
E)  $1,500.

Question 17

Compute the consideration transferred in excess of book value acquired at January 1, 2017.

Accepted Answer

A)  $ 150. 
B)  $ 700. 
C)  $2,200. 
D)  $ 550. 
E)  $2,900.

Question 18

Compute the amount of Hurley's long-term liabilities that would be reported in a December 31, 2018, consolidated balance sheet.

Accepted Answer

A)  $1,700. 
B)  $1,800. 
C)  $1,650. 
D)  $1,750. 
E)  $3,500.

Question 19

Red Co.acquired 100% of Green, Inc.on January 1, 2017.On that date, Green had land with a book value of $42,000 and a fair value of $52,000.Also, on the date of acquisition, Green had a building with a book value of $200,000 and a fair value of $390,000.Green had equipment with a book value of $350,000 and a fair value of $280,000.The building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life.How much total expense will be in the consolidated financial statements for the year ended December 31, 2017 related to the acquisition allocations of Green?

Accepted Answer

A)  $43,000. 
B)  $33,000. 
C)  $ 5,000. 
D)  $15,000. 
E)  $0.

Question 20

If the parent's net income reflected use of the partial equity method, what were the consolidated retained earnings on December 31, 2018?

Accepted Answer