Chap003 - Chapter 03 - The Reporting Entity and...

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Chapter 03 - The Reporting Entity and Consolidated Financial Statements Chapter 03 The Reporting Entity and Consolidated Financial Statements Multiple Choice Questions On January 3, 2009, Jane Company acquired 75 percent of Miller Company's outstanding common stock for cash. The fair value of the noncontrolling interest was equal to a proportionate share of the book value of Miller Company's net assets at the date of acquisition. Selected balance sheet data at December 31, 2009, are as follows: 1. Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Jane Company's December 31, 2009, consolidated balance sheet? A. $90,000 B. $54,000 C. $36,000 D. $0 2. Based on the preceding information, what amount will Jane Company report as common stock outstanding in its consolidated balance sheet at December 31, 2009? A. $120,000 B. $180,000 C. $156,000 D. $264,000 3-1
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Chapter 03 - The Reporting Entity and Consolidated Financial Statements Beta Company acquired 100 percent of the voting common shares of Standard Video Corporation, its bitter rival, by issuing bonds with a par value and fair value of $150,000. Immediately prior to the acquisition, Beta reported total assets of $500,000, liabilities of $280,000, and stockholders' equity of $220,000. At that date, Standard Video reported total assets of $400,000, liabilities of $250,000, and stockholders' equity of $150,000. Included in Standard's liabilities was an account payable to Beta in the amount of $20,000, which Beta included in its accounts receivable. 3. Based on the preceding information, what amount of total assets did Beta report in its balance sheet immediately after the acquisition? A. $500,000 B. $650,000 C. $750,000 D. $900,000 4. Based on the preceding information, what amount of total assets was reported in the consolidated balance sheet immediately after acquisition? A. $650,000 B. $880,000 C. $920,000 D. $750,000 5. Based on the preceding information, what amount of total liabilities was reported in the consolidated balance sheet immediately after acquisition? A. $500,000 B. $530,000 C. $280,000 D. $660,000 3-2
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Chapter 03 - The Reporting Entity and Consolidated Financial Statements 6. Based on the preceding information, what amount of stockholders' equity was reported in the consolidated balance sheet immediately after acquisition? A. $220,000 B. $150,000 C. $370,000 D. $350,000 7. Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo. Company Esstwo owns 100 percent of Company Essthree. Consolidated financial statements should be prepared to report the financial status and results of operations for: A. Pea. B. Pea plus Essone. C. Pea plus Essone plus Esstwo. D. Pea plus Essone plus Esstwo plus Essthree. 8. Xing Corporation owns 80 percent of the voting common shares of Adams Corporation. Noncontrolling interest was assigned $24,000 of income in the 2009 consolidated income statement. What amount of net income did Adams Corporation report for the year? A. $150,000
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This note was uploaded on 04/30/2010 for the course ACCT 05544 taught by Professor Hader during the Spring '10 term at Kean.

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Chap003 - Chapter 03 - The Reporting Entity and...

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