Exercise 1 Submitted Sep 18 at 9: 45am Question 1



Download 13.74 Kb.
Date17.12.2020
Size13.74 Kb.
#55052
Exercise 1
9781285867045 TB Chapter 1 Data and Statistics, ch3

Exercise 1

Submitted Sep 18 at 9:45am


Question 1

If AA Company acquires 80 percent of the stock of BB Company on January 1, 20x2, immediately after the acquisition consolidated retained earnings will be equal to the combined retained earnings of the two companies.

  

True


False

 

Question 2



On the consolidated balance sheet, consolidated stockholders' equity is equal to the sum of the parent and subsidiary stockholders' equity.

  

True



False

  

Question 3



The goal of the consolidation process is for asset acquisitions and 100% stock acquisitions to result in the same balance sheet.

  

True



False

 

Question 4



When companies employ push-down accounting all consolidation elimination entries are made on the books of the subsidiary rather than in consolidated workpapers.

  

True



False

 

Question 5



How is the portion of consolidated earnings to be assigned to non-controlling interest in consolidated financial statements determined the amount of the subsidiary's earnings is mutiplied by the non- controlling's percentage ownership and is adjusted for the excess cost amortization applicable to the NCI.

  

True  



False

 

Question 6



In a business combination accounted for as an acquisition, registration costs related to common stock issued by the parent company are deducted from other contributed capital.

  

True  



False

  

Question 7



When the implied value exceeds the aggregate fair values of  identifiable net assets, the residual difference is accounted for as goodwill.

  

True  



False

 

 


Question 8

Majority-owned subsidiaries should be excluded from the consolidated statements when control does not rest with the majority owner.

  

True


False

 

Question 9



JJ Company acquired 85% of MR Company on April 1. On its December 31,consolidated income statement, how should JJ account for  MR's revenues and expenses that occurred before April 1 include 100 percent of MR's revenue and expenses and deduct the pre-acquisition portion as non-controlling interest in net income.

  

True



False

 

Question 10



Under the economic entity concept, consolidated financial statements are intended primarily for the benefit of the minority stockholders.

  

True



False

  

Question 11



The primary beneficiary of a variable interest entity (VIE) must consolidate the VIE into its financial statements whenever the voting rights are not proportional to the obligations to absorb the expected losses or receive expected residual returns.

  

True



False

 

Question 12



Goodwill represents the excess of the implied value of an acquired company over the aggregate fair values of tangible asset less liabilities assumed.

  

True



False

 

 



Question 13

Goodwill  is reported when the fair value of the acquire is greater than the fair value of the net identifiable assets acquired.

  

True


False

 

Question 14



When a company purchases another company that has existing goodwill and the transaction is accounted for as a stock acquisition, the goodwill should be treated in the following manner goodwill on the books of an acquired company should be disregarded.

  

True



False

  

Question 15



When a company purchases another company that has existing goodwill and the transaction is accounted for as a stock acquisition, the goodwill should be treated in the following manner goodwill is not recorded prior to recording fixed assets.

  

True



False

 

Question 16



Presenting consolidated financial statements this year when statements of individual companies were presented last year is the correction of an error.

  

True



False

  

Question 17



Dividends declared by a subsidiary are eliminated against dividend income recorded by the parent under the equity method.

  

True



False

 

Question 18



Goodwill is seldom reported because it is too difficult to measure.

  

True



False

 

Question 19



The SEC requires the use of push down accounting when the ownership change is greater than 90%.

  

True



False

 

Question 20



A new acquired subsidiary has pre-existing goodwill on its books. The parent company's consolidated balance sheet will do an impairment test to see if any of it has been impaired.

  

True



False

 
Download 13.74 Kb.

Share with your friends:




The database is protected by copyright ©ininet.org 2022
send message

    Main page