Indiana University of Pennsylvania
Department of Accounting
ACCT 401/501: Advanced Accounting
Sample Quiz for Chapter 3
Circle the best choice.
Penguin Corporation owns 90% of the outstanding voting stock of Crevice
Company and Burrow Corporation owns the remaining 10% of Crevice’s voting
stock. On the consolidated financial statements of Penguin Corporation and
Subsidiary, Burrow is
a noncontrolling interest.
an equity investee.
a related party
On June 1, 2018, Gull Company acquired 100% of the stock of Scrap Inc. On this
date, Gull had Retained Earnings of $200,000 and Scrap had Retained Earnings of
$100,000. On December 31, 2018, Gull had Retained Earnings of $240,000 and
Scrap had Retained Earnings of $120,000. The amount of Retained Earnings that
appeared in the December 31, 2018 consolidated balance sheet was:
On July 1, 2018, when Worm Company’s total stockholders’ equity was $180,000,
Bird Corporation purchased 7,000 shares of Worm’s common stock at $30 per
share. Worm Company had 10,000 shares of common stock outstanding both before
and after the purchase by Bird, and the book value of Worm’s net assets on July 1,
2018 was equal to the fair value. On a consolidated balance sheet prepared at July 1,
2018, goodwill would be
A newly acquired subsidiary had pre-existing goodwill on its books. The parent
company's consolidated balance sheet will
not show any value for the subsidiary's pre-existing goodwill.
treat the goodwill similarly to other intangible assets of the acquired