ACC 4700 QUIZ 4 Chapter 04 Consolidated Financial Statements

| December 9, 2017

ACC
4700
QUIZ
4
Chapter 04 Consolidated Financial Statements and
Outside Ownership

Last Name

First Name

QUESTION #1
19.
MacHeath Inc. bought 60% of the outstanding common stock of Nomes Inc.
in an acquisition business combination
that resulted in the recognition of goodwill.
Nomes owned a piece of land that cost $250,000 but was worth $600,000
at the date of acquisition. What value
would be attributed to this land in a consolidated
balance sheet at the date of acquisition?

A) $250,000.
B) $150,000.
C) $600,000.
D) $360,000.
E) $460,000.

QUESTION #2
1.
For business combinations involving less than 100 percent ownership,
the acquirer recognizes and measures all of the following at the acquisition
date except:
A) identifiable assets
acquired, at fair value.
B) liabilities assumed,
at book value.
C) noncontrolling
interest, at fair value.
D) goodwill or a gain
from bargain purchase.
E) none of these choices
is correct.

REFERENCE:
Ref. 04_1
When
Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land
with a book value of $70,000 and a fair value of $100,000.

QUESTION #3
REFER TO: Ref. 04_1
2.
What amount should have been reported for the land in a consolidated
balance sheet at the acquisition date?
A) $52,500.
B) $70,000.
C) $75,000.
D) $92,500.
E) $100,000.

QUESTION #4
REFER TO: Ref. 04_01
3.
What is the total amount of excess land allocation at the acquisition
date?
A) $0.
B) $30,000.
C) $22,500.
D) $25,000.
E) $17,500.

QUESTION #5
REFER TO: Ref. 04_01
4.
What is the amount of excess land allocation attributed to the
controlling interest at the acquisition date?
A) $0.
B) $30,000.
C) $22,500.
D) $25,000.
E) $17,500.

QUESTION #6
REFER TO: Ref. 04_01
5.
What is the amount of excess land allocation attributed to the
noncontrolling interest at the acquisition date?
A) $0.
B) $30,000.
C) $22,500.
D) $7,500.
E) $17,500.

REFERENCE:
Ref. 04_02
Perch Co. acquired 80% of the common stock of Float Corp. for
$1,600,000. The fair value ofFloat’s individually identified net
assets was $1,850,000, and the book value was $1,500,000. The noncontrolling interest shares of Float Corp. are not actively traded.

QUESTION #7
REFER TO: Ref.
04_02
7.
What is the total amount of goodwill
recognized at the date of
acquisition?
A) $150,000.
B) $250,000.
C) $0.
D) $120,000.
E) $170,000.

QUESTION #8
REFER TO: Ref.
04_02
8.
What amount of goodwill
should be attributed to Perch at the date of acquisition?
A) $150,000.
B) $250,000.
C) $0.
D) $120,000.
E) $170,000.

QUESTION #9
REFER TO: Ref.
04_02
9.
What amount of goodwill
should be attributed to the noncontrolling interest at the date of
acquisition?
A) $0.
B) $20,000.
C) $30,000.
D) $100,000.
E) $120,000.

QUESTION #10
REFER TO: Ref.
04_02
10.
What is the dollar amount of noncontrolling interest that
should appear in a consolidated balance sheet prepared at the date of
acquisition?
A) $350,000.
B) $300,000.
C) $400,000.
D) $370,000.
E) $0.

QUESTION #11
REFER TO: Ref.
04_02
11.
What is the dollar amount ofFloat Corp.’s individually identified net assets that would be represented in a consolidated balance
sheet prepared at the date of acquisition?
A) $1,600,000.
B) $1,480,000.
C) $1,200,000.
D) $1,780,000.
E) $1,850,000.

QUESTION #12
REFER TO: Ref.
04_02
12.
What is the dollar amount of fair
value over book value differences attributed to Perch at the date of
acquisition?
A) $120,000.
B) $150,000.
C) $280,000.
D) $350,000.
E) $370,000.

REFERENCE:
Ref. 04_03
Femur Co. acquired 70% of the voting common stock of Harbor
Corp. on January 1, 2010. During 2010,
Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of excess cost allocations
totaled $60,000 in 2010.

QUESTION #13
REFER TO: Ref.
04_03
13.
The noncontrolling interest’s share of the earnings of Harbor Corp. is
calculated to be
A) $132,000.
B) $150,000.
C) $168,000.
D) $160,000.
E) $0.

QUESTION #14
REFER TO: Ref.
04_03
14.
What is the effect of
including Harbor in consolidated net
income for 2010?
A) $350,000.
B) $308,000.
C) $500,000.
D) $440,000.
E) $290,000.

QUESTION #15
20.
Kordel Inc. acquired 75% of the outstanding common stock of Raxston
Corp. Raxston currently owes Kordel
$500,000 for inventory acquired over the past few months. In preparing consolidated financial statements, what amount of this debt
should be eliminated?
A) $375,000
B) $125,000
C) $300,000
D) $500,000
E) $0.

REFERENCE: Ref. 04_07
McGuire
company acquired 90 percent of Hogan Company on January 1, 2010, for $234,000
cash. This amount is reflective of
Hogan’s total fair value. Hogan’s
stockholders’ equity consisted of common stock of $160,000 and retained
earnings of $80,000. An analysis of
Hogan’s net assets revealed the following:

.0/msohtmlclip1/01/clip_image001.gif”>
Any excess consideration
transferred over fair value is attributable to an unamortized patent with a
useful life of 5 years.

QUESTION #16
REFER TO: Ref. 04_07
41.
The acquisition value attributable to the noncontrolling interest at
January 1, 2010 Is:
A) $23,400.
B) $24,000.
C) $24,900.
D) $26,000.
E) $20,000.

QUESTION
#17
42.
In consolidation at January 1, 2010, what adjustment is necessary for
Hogan’s Buildings account?
A) $2,000 increase.
B) $2,000 decrease.
C) $1,800 increase.
D) $1,800 decrease.
E) No change.

QUESTION #18
REFER TO: Ref. 04_07
43.
In consolidation at December 31, 2010, what adjustment is necessary
for Hogan’s Buildings account?
A) $1,620 increase.
B) $1,620 decrease.
C) $1,800 increase.
D) $1,800 decrease.
E) No adjustment is
necessary.

QUESTION #19
REFER TO: Ref. 04_07
44.
In consolidation at December 31, 2011, what adjustment is necessary for
Hogan’s Buildings account?
A) $1,440 increase.
B) $1,440 decrease.
C) $1,600 increase.
D) $1,600 decrease.
E) No adjustment is
necessary.

QUESTION
#20
REFER TO: Ref. 04_07
45.
In consolidation at January 1, 2010, what adjustment is necessary for
Hogan’s Equipment account?
A) $4,000 increase.
B) $4,000 decrease.
C) $3,600 increase.
D) $3,600 decrease.
E) No adjustment is
necessary.

QUESTION #21
REFER TO: Ref. 04_07
46.
In consolidation at December 31, 2010, what adjustment is necessary
for Hogan’s Equipment account?
A) $3,000 increase.
B) $3,000 decrease.
C) $2,700 increase.
D) $2,700 decrease.
E) No adjustment is
necessary.

QUESTION #22
REFER TO: Ref. 04_07
48.
In consolidation at January 1, 2010, what adjustment is necessary for
Hogan’s Land account?
A) $7,000 increase.
B) $7,000 decrease.
C) $6,300 increase.
D) $6,300 decrease.
E) No adjustment is
necessary.

QUESTION #23
REFER TO: Ref. 04_07
49.
In consolidation at December 31, 2010, what adjustment is necessary
for Hogan’s Land account?
A) $8,000 decrease .
B) $7,000 increase.
C) $6,300 increase.
D) $6,300 decrease.
E) No adjustment is
necessary.

QUESTION #24
REFER TO: Ref. 04_07
51.
In consolidation at January 1, 2010, what adjustment is necessary for
Hogan’s Patent account?
A) $7,000.
B) $6,300.
C) $11,000.
D) $9,900.
E) No adjustment is
necessary.

REFERENCE:
Ref. 04_08
Pell
Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000
and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and
buildings were undervalued by $40,000, each having a 10-year remaining
life. Any excess consideration
transferred over fair value was attributed to goodwill with an indefinite
life. Based on an annual review,
goodwill has not been impaired.
Demers
earns income and pays dividends as follows:

.0/msohtmlclip1/01/clip_image002.gif”>
Assume
the equity method is applied.

QUESTION #25
REFER TO: Ref. 04_08
54.
Compute Pell’s investment in Demers at December 31, 2010.
A) $580,000.
B) $574,400.
C) $548,000.
D) $542,400.
E) $541,000.

QUESTION #26
REFER TO: Ref. 04_08
55.
Compute Pell’s investment in Demers at December 31, 2011.
A) $577,200.
B) $604,000.
C) $592,800.
D) $632,800.
E) $572,000.

QUESTION #27
REFER TO: Ref. 04_08
57.
Compute Pell’s income from Demers for the year ended December 31,
2010.
A) $74,400.
B) $73,000.
C) $42,400.
D) $41,000.
E) $80,000.

QUESTION #28
REFER TO: Ref. 04_08
58.
Compute Pell’s income from Demers for the year ended December 31,
2011.
A) $90,400.
B) $89,000.
C) $50,400.
D) $56,000.
E) $96,000.

QUESTION #29
REFER TO: Ref. 04_08
60.
Compute the noncontrolling interest in the net income of Demers at
December 31, 2010.
A) $20,000.
B) $12,000.
C) $18,600.
D) $10,600.
E) $14,400.

QUESTION #30
REFER TO: Ref. 04_08
61.
Compute the noncontrolling interest in the net income of Demers at
December 31, 2011.
A) $18,400.
B) $14,400.
C) $22,600.
D) $24,000.
E) $12,600.

QUESTION #31
REFER TO: Ref. 04_08
63.
Compute the noncontrolling interest in Demers at December 31, 2010.
A) $135,600.
B) $137,000.
C) $112,000.
D) $100,000.
E) $118,600.

QUESTION #32
REFER TO: Ref. 04_08
64.
Compute the noncontrolling interest in Demers at December 31, 2011.
A) $107,000.
B) $126,000.
C) $109,200.
D) $149,600.
E) $148,200.

Order your essay today and save 30% with the discount code: ESSAYHELPOrder Now