Multiple Choice- Chapter 2

Multiple Choice- Chapter 2 - 9. B Consideration transferred...

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

View Full Document Right Arrow Icon
Chapter 2- Answers to Multiple Choice 1. B 2. D 3. B 4. A 5. D 6. A 7. B Consideration transferred (fair value) $800,000 Fair value of identifiable assets Cash $150,000 A/R 140,000 Software 320,000 In-process R&D 200,000 Liabilities (130,000 ) Fair value of net identifiable assets acquired 680,000 Goodwill $120,000 8. C Atkins records new shares at fair value Value of shares issued (51,000 × $3). ...................................... $153,000 Par value of shares issued (51,000 × $1) . ............................... 51,000 Additional paid-in capital (new shares) . ................................ $102,000 Additional paid-in capital (existing shares) . .......................... 90,000 Consolidated additional paid-in capital . ................................. $192,000 At the date of acquisition, the parent makes no change to retained earnings.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 9. B Consideration transferred (fair value). ......................... $400,000 Book value of subsidiary (assets minus liabilities). ... (300,000 ) Fair value in excess of book value. .......................... 100,000 Allocation of excess fair over book value identified with specific accounts: Inventory. .................................................................... 30,000 Patented technology . ................................................ 20,000 Buildings and equipment. ......................................... 25,000 Long-term liabilities. .................................................. 10,000 Goodwill. ..................................................................... $15,000 10. A Only the subsidiarys post-acquisition income is included in consolidated totals....
View Full Document

Ask a homework question - tutors are online