test practice 11 - 20. award: 0 out of 0 points On January...

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

View Full Document Right Arrow Icon
20. award: 0 out of 0 points On January 1, 2012, Cocker issued 10,000 additional shares of common stock for $35 per share. Popper acquired 8,000 of these shares. How would this transaction affect the additional paid-in capital of the parent company? Increase it by $28,700. Increase it by $16,800. $0. Increase it by $280,000. Increase it by $593,600. referenc es 21. award: 0 out of 0 points On January 1, 2012, Cocker issued 10,000 additional shares of common stock for $21 per share. Popper did not acquire any of this newly issued stock. How would this transaction affect the additional paid-in capital of the parent company? $0. Decrease it by $23,240. Decrease it by $68,250. Decrease it by $45,060. Decrease it by $43,680. references 22. award: 0 out of 0 points On January 1, 2012, Cocker reacquired 8,000 of the outstanding shares of its own common stock for $34 per share. None of these shares belonged to Popper. How would this transaction have affected the additional paid-in capital of the parent company? $0.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Decrease it by $32,900. Decrease it by $45,700. Decrease it by $49,400. Decrease it by $50,500. If newly issued debt is issued from a parent to its subsidiary, which of the following statements is false ? Any premium or discount on bonds payable is exactly offset by a premium or discount on bond investment. There will be $0 net gain or loss on the bond transaction. Interest expense needs to be eliminated on the consolidated income statement. Interest revenue needs to be eliminated on the consolidated income statement. A net gain or loss on the bond transaction will be reported. The accounting problems encountered in consolidated intra-entity debt transactions when the debt is acquired by an affiliate from an outside party include all of the following except : Both the investment and debt accounts have to be eliminated now and for each future consolidated financial statement despite containing differing balances. Subsequent interest revenue/expense must be removed although these balances fail to agree in amount. A gain or loss must be recognized by both parent and subsidiary companies. Changes in the investment, debt, interest revenue, and interest expense accounts occur constantly because of the amortization process. The gain or loss on the retirement of the debt must be recognized by the business combination in the
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 11/26/2011 for the course ADVANCED A 4110 taught by Professor Fridel during the Spring '11 term at University of Minnesota Duluth.

Page1 / 6

test practice 11 - 20. award: 0 out of 0 points On January...

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