Ch5 - Ch5 Student: _ 1. On January 1, 2008, Sun acquired 70...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Ch5 Student: ___________________________________________________________________________ 1. On January 1, 2008, Sun acquired 70 percent of Ryan's voting common stock for $450,000, an amount $30,000 higher than the underlying book value of Ryan's net assets. The fair value of Ryan's net assets was equal to their book values. Any purchase differential is attributable to goodwill. On December 31, 2009, assuming no impairment of any assets, the consolidated balance sheet goodwill should be reported at: A. zero. B. the purchase differential. C. the purchase differential minus differential amortization. D. the purchase differential divided by 70 percent. 2. On January 1, 2005, Sun acquired 70 percent of Ryan's voting common stock for $4,000,000, an amount $400,000 higher than the underlying book value of Ryan's net assets. The fair value of Ryan's net assets was equal to their book values. Any purchase differential is attributable to goodwill. On December 31, 2008, goodwill was tested for impairment and was determined to have a value of $180,000. What is the effect of the impairment on the year 2008 consolidated net income? A. Decrease income from continuing operations by $220,000. B. Increase extraordinary losses by $220,000. C. Increase net income by $220,000. D. Decrease net income assigned to noncontrolling interests by $66,000. 3. Wade Company purchased 65 percent of Ten Corporation's voting common stock for $120,000 more than underlying book value, half of which is attributable to goodwill and the other half to land. Wade Company's control over Ten is only temporary. What amount of the purchase differential should be assigned to Land following the acquisition? A. $0. B. $39,000. C. $60,000. D. $120,000.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Balance sheets for Fort Corporation and Steele Company on December 31, 2008, are as follows: Fort Corporation acquired 80 percent ownership of Steele Company for $450,000 on January 1, 2009. On that date, the fair value of Fort's depreciable assets was $600,000 and the fair value of Steele's depreciable assets was $280,000. Steele owed Fort $20,000 on account at the date of combination. 4. Based on the information given above, what amount of depreciable assets will be reported in a consolidated balance sheet prepared immediately following the combination? A. $670,000. B. $766,000. C. $824,000. D. $880,000. 5. Based on the information given above, what amount will be reported for retained earnings in a consolidated balance sheet prepared immediately following the combination? A. $880,000. B. $1,040,000. C. $1,080,000. D. $1,208,000. 6. Based on the information given above, what amount of goodwill will be reported in a consolidated balance sheet prepared immediately following the combination? A. $0.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/26/2011 for the course ACCT 410 taught by Professor Khalib during the Spring '11 term at Strayer.

Page1 / 34

Ch5 - Ch5 Student: _ 1. On January 1, 2008, Sun acquired 70...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online