Worksheet.doc - Name Id No P.O.Box City(Town Region(Zone...

Info icon This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Name________________________ Id. No_______________________ P.O.Box______________________ City (Town)___________________ Region (Zone)_________________ UNITY UNIVERSITY COLLEGE SCHOOL OF DISTANCE AND CONTINUING EDUCATION Worksheet for Advanced Accounting I (Acct 401) This is a test paper you are expected to do on your own. It carries 15 points. The test paper should be completed and mailed to the School of Distance and Continuing Education for evaluation. Do not try to complete the worksheet until you have covered all the lessons and exercises in the course material. Any questions in the course that you have not been able to understand should be stated on a separate sheet of paper and attached to this worksheet. Your tutor will clarify them for you. After completing this test paper, be certain to write your Name, Id.No and Address on the first page. Your Name and Id.No on the other pages only. 0 Part I: select the best answer (5 marks) 1. Which of the following sets of accounts must always be kept in agreement? a) Investment in branch and Equity In Home office. b) Shipments to branch and shipments from home office c) Branch income and equity in branch income d) None of the above 2. Cash dividends declared out of current earnings are distributed to an investor. How will be investors investment account be affected by those dividends under each of the following accounting methods. a b c d 3. Cost method Decrease Decrease No effect No effect Equity method No effect Decrease Decrease No effect How are dividends paid to minority share holders reported in the consolidated statements? a) They reduce the amount reported as “minority interest in net income of subsidiary” in the consolidated income statement. b) They reduce the amount reported as “minority interest in net assets of subsidiary” in the consolidated balance sheet. c) They are included in the dividends declared line in the consolidated statement of retained earnings. d) They are combined with expenses in the consolidated income statement e) None of the above 4. A subsidiary may be acquired by issuing common stock in a pooling of interests transaction or by paying cash in a purchase transaction. Which of the following items would be reported in the consolidated financial statements at the same amount regardless of the accounting method used? a) Minority interest b) goodwill c) retaining earnings d. capital stock account (in total) 1 5. How would the retained earnings of a subsidiary acquired in a business combination usually be treated in a consolidated balance sheet prepared immediately after the acquisition under each of the following methods? a b c d Pooling of Purchase Interests Excluded Excluded Included Included Method Excluded Included Included Excluded Part II. Exercises A. The following transactions pertain to a branch’s first month’s operations: 1. The home office sent $9,000 cash to a branch. 2. The home office shipped inventory costing $40,000 to the branch; inter company bulling was for $50,000. 3. Branch inventory purchases from outside vendors totaled $30,000. 4. Branch sales on account were $80,000. 5. The home office allocated $2,000 in adverting expense to the branch 6. Branch collection on accounts receivable were $45,000. 7. Branch operating expenses of $14,000 were incurred, none of which were paid at monthend. 8. The branch remitted $17,000 to the home office. 9. The branch’s ending inventory (as reported in its balance sheet) is composed of: Acquired from outside vendors Acquired from home office (at billing) Total $12,000 20,000 32,000 Required (5 marks) Prepare the home office and branch journal entries for these transactions, assuming that a periodic inventory system is used. B. P company acquired 100% of the outstanding common stock of S company for $2,300,000 cash and 10,000 shares of its common stock ($2 par value), which was traded at $40 per share at these acquisition date. 2 Required (3 makers) Prepare the entry to record the business combination on P Company’s books. C. Parda Corporation issued voting common stock with $90,000 stated value in exchange for all of the outstanding common stock of SOO Company. The combination was properly accounted for as a pooling of interests. The stockholder’s equity section of SOO’s SOO’s balance sheet at the combination date was as follows: Common stock Capital contributed in excess of $70,000 stated value Retained earnings 7,000 50,000 127,000 Required (2 marks) What should be the increase in Parda’s Parda’s stock holder’s equity at the acquisition date as a result of this business combination? 3 ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern