CH 4 Multiple Choice Questions

CH 4 Multiple Choice Questions - Multiple Choice Questions...

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Multiple Choice Questions Questions 1 through 5 are based on the following information. On January 1, 2012, Cobb Enterprises acquired 80% of Bob’s Bricks Inc.’s outstanding common shares. The acquisition price was considered proportionate to Bob Brick’s total fair value. In acquiring this interest, Cobb paid a total of $3,000,000. Bob’s Bricks’ net assets had a book value of $2,600,000 at the time. A building with a ten-year life and a book value of $200,000 was worth $350,000. Any other excess amount was attributed to goodwill. Cobb reports net income for 2012 of $700,000 (without regard for its ownership in Bob’s Bricks), while Bob’s Bricks has $350,000 in earnings. 1. On a consolidated balance sheet as of 12/31/2012, what is the amount of goodwill? A. $1,030,000 B. $1,000,000 C. $1,550,000 D. $ 800,000 E. $1,150,000 2. What is the amount of consolidated net income for the year ended 12/31/2012? A. $1,050,000 B. $ 980,000 C. $ 993,000 D. $ 968,000 E. $1,035,000 3. What is the amount of consolidated net income attributable to the controlling interest for the year ended 12/31/2012? A. $1,050,000 B. $ 980,000 C. $ 993,000 D. $ 968,000 E. $1,035,000 4. What value should be attributed to the building in a consolidated balance sheet at the date of the business combination? A. $335,000 B. $200,000 C. $310,000 D. $320,000 E. $350,000 5. What value should be attributed to the building in a consolidated balance sheet as of 12/31/2012? A. $335,000 B. $200,000 C. $310,000 D. $320,000
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E. $350,000 Items 6 and 7 are based on the following information: On January 1, 2008, Ashley Inc. acquires 60% of Mask Co.’s outstanding common stock by issuing common stock with a market value of $180,000. Mask reported common stock on that date of $150,000 with retained earnings of $80,000. Equipment, which had a five-year
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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.

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CH 4 Multiple Choice Questions - Multiple Choice Questions...

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