ACC401 Adv Accounting I Week 3 Review Test Submission: Quiz 2 Quiz 2 on chapter 3

Question 1 2 out of 2 points

Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011. On the date of acquisition, Princeton held land with a book value of $150,000 and a fair value of $300,000; Sheffield held land with a book value of $100,000 and fair value of $500,000. What amount would land be reported in the consolidated balance sheet prepared immediately after the combination? Answer Selected Answer:

$650,0 00

Correct Answer:

$650,0 00

Question 2 2 out of 2 points

Pine Corp. owns 60% of Sage Corp.'s outstanding common stock. On May 1, 2011, Pine advanced Sage $90,000 in cash, which was still outstanding at December 31, 2011. What portion of this advance should be eliminated in the preparation of the December 31, 2011 consolidated balance sheet? Answer Selected Answer:

$90,00 0. Correct Answer:

$90,00 0.

Question 3 2 out of 2 points

A majority-owned subsidiary that is in legal reorganization should normally be accounted for using Answer Selected Answer:

the cost method.

Correct Answer:

the cost method.

Question 4 2 out of 2 points

Under the acquisition method, indirect costs relating to acquisitions should be Answer Selected Answer:

expensed as incurred.

Correct Answer:

expensed as incurred.

Question 5 2 out of 2 points

On the consolidated balance sheet, consolidated stockholders' equity is Answer Selected Answer:

equal to the parent's stockholders' equity.

Correct Answer:

equal to the parent's stockholders' equity.

Question 6 2 out of 2 points

On January 1, 2011, Pena Company and Shelby Company had condensed balanced sheets as follows: Pena Current assets Noncurrent assets Total assets Shelby

$210,000 $ 60,000 270,000 120,000

$480,000 $180,000

Current liabilities Long-term debt Stockholders' equity Total liabilities & stockholders' equity

$ 90,000 $ 30,000 150,000 240,000 -0150,000

$480,000 $180,000

On January 2, 2011 Pena borrowed $180,000 and used the proceeds to

purchase 90% of the outstanding common stock of Shelby. This debt is payable in 10 equal annual principal payments, plus interest, starting December 30, 2011. Any difference between book value and the value implied by the purchase price relates to land. On Pena's January 2, 2011 consolidated balance sheet, noncurrent assets should be Answer Selected Answer:

$440,0 00.

Correct Answer:

$440,0 00.

Question 7 2 out of 2 points

A newly acquired subsidiary has pre-existing goodwill on its books. The parent companys consolidated balance sheet will: Answer Selected Answer:

not show any value for the subsidiarys preexisting goodwill.

Correct Answer:

not show any value for the subsidiarys preexisting goodwill.

Question 8 2 out of 2 points

What is the method of presentation required by SFAS 160 of non-controlling interest on a consolidated balance sheet? Answer Selected Answer:

As a part of stockholders' equity.

Correct Answer:

As a part of stockholders' equity.

Question 9 2 out of 2 points

In which of the following cases would consolidation be inappropriate? Answer Selected Answer:

The subsidiary is in bankruptcy.

Correct Answer:

The subsidiary is in bankruptcy.

Question 10 2 out of 2 points

In a business combination accounted for as an acquisition, registration costs related to common stock issued by the parent company are Answer Selected Answer:

deducted from other contributed

capital. Correct Answer:

deducted from other contributed capital.

Question 11 2 out of 2 points

Eliminating entries are made to cancel the effects of intercompany transactions and are made on the Answer Selected Answer:

workpaper only.

Correct Answer:

workpaper only.

Question 12 2 out of 2 points

On January 1, 2011, Polk Company and Sigler Company had condensed balance sheets as follows: Polk Current assets Noncurrent assets Total assets Sigler

$280,000 $ 80,000 360,000 160,000

$640,000 $240,000

Current liabilities Long-term debt

$120,000 $ 40,000 200,000 -0-

Stockholders' equity Total liabilities & stockholders' equity

320,000

200,000

$640,000 $240,000

On January 2, 2011 Polk borrowed $240,000 and used the proceeds to purchase 90% of the outstanding common stock of Sigler. This debt is payable in 10 equal annual principal payments, plus interest, starting December 30, 2011. Any difference between book value and the value implied by the purchase price relates to land. On Polk's January 2, 2011 consolidated balance sheet, noncurrent assets should be Answer Selected Answer:

$586,6 67.

Correct Answer:

$586,6 67.

Question 13 2 out of 2 points

On January 1, 2011, Pena Company and Shelby Company had condensed balanced sheets as follows: Pena Current assets Noncurrent assets Total assets Shelby

$210,000 $ 60,000 270,000 120,000

$480,000 $180,000

Current liabilities Long-term debt

$ 90,000 $ 30,000 150,000 -0-

Stockholders' equity Total liabilities & stockholders' equity

240,000

150,000

$480,000 $180,000

On January 2, 2011 Pena borrowed $180,000 and used the proceeds to purchase 90% of the outstanding common stock of Shelby. This debt is payable in 10 equal annual principal payments, plus interest, starting December 30, 2011. Any difference between book value and the value implied by the purchase price relates to land. On Pena's January 2, 2011 consolidated balance sheet, noncurrent liabilities should be Answer Selected Answer:

$312,0 00.

Correct Answer:

$312,0 00.

Question 14 2 out of 2 points

The main evidence of control for purposes of consolidated financial statements involves Answer Selected Answer:

having decision-making ability that is not shared with others.

Correct Answer:

having decision-making ability that is not shared with others. Question 15 2 out of 2 points

On January 1, 2011, Polk Company and Sigler Company had condensed balance sheets as follows: Polk Current assets Noncurrent assets Total assets Sigler

$280,000 $ 80,000 360,000 160,000

$640,000 $240,000

Current liabilities Long-term debt Stockholders' equity Total liabilities & stockholders' equity

$120,000 $ 40,000 200,000 320,000 -0200,000

$640,000 $240,000

On January 2, 2011 Polk borrowed $240,000 and used the proceeds to purchase 90% of the outstanding common stock of Sigler. This debt is payable in 10 equal annual principal payments, plus interest, starting December 30, 2011. Any difference between book value and the value implied by the purchase price relates to land. On Polk's January 2, 2011 consolidated balance sheet, noncurrent liabilities should be Answer Selected Answer:

$416,0 00.

Correct

Answer: $416,0 00. Sunday, February 3, 2013 9:35:30 AM EST OK