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Unformatted text preview: Resu lts Reporter Out of 10 questions, you answered 10 correctly with a final grade of 100% 10 correct (100%) 0 incorrect (0%) 0 unanswered (0%) Your Results: The correct answer for each question is indicated by a . 1 CORRECT Parks, Inc. paid $10 for 80,000 of the 100,000 shares of KO, Inc, when KO's net assets had a total fair value of $950,000. During the weeks before and after this acquisition, the shares of KO, Inc. have traded for $9 per share. What is the total acquisition business fair value of KO, Inc.? A) $800,000 B) $900,000 C) $980,000 D) $1.000,000 E) $950,000 Feedback: 2 CORRECT Parks, Inc. paid $10 for 80,000 of the 100,000 shares of KO, Inc, when KO's net assets had a total fair value of $950,000. During the weeks before and after this acquisition, the shares of KO, Inc. have traded for $9 per share. How much goodwill should Parks report in its post-combination consolidated balance sheet? A) $24,000 B) $30,000 C) $50,000 D) $120,000 E) $150,000 Feedback: 3 CORRECT A basic premise of the acquisition method is that the: A) ultimate objective of consolidated financial statements is to serve as a report to the stockholders of the parent company. B) subsidiary's book value and the purchase price paid by the parent are viewed as separate elements that can be accounted for individually within the consolidation process. C) subsidiary's individual accounts cannot be divided along ownership lines. D) values utilized for consolidation reflect the parent's payment attributed to each subsidiary asset and liability....
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This note was uploaded on 08/25/2011 for the course ACCT 440 taught by Professor Suresh during the Spring '11 term at Copenhagen Business School.
- Spring '11