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Chap003 - Chapter 03 Consolidations Subsequent to the Date...

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Chapter 03 - Consolidations - Subsequent to the Date of Acquisition Chapter 03 Consolidations - Subsequent to the Date of Acquisition Multiple Choice Questions 1. Which one of the following accounts would not appear on the consolidated financial statements at the end of the first fiscal period of the combination? A. Goodwill B. Equipment C. Investment in Subsidiary D. Common Stock E. Additional Paid-In Capital Difficulty: Easy 2. Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination? Difficulty: Easy 3. Which one of the following varies between the equity, initial value and partial equity methods of accounting for an investment? Difficulty: Medium 3-1
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Chapter 03 - Consolidations - Subsequent to the Date of Acquisition 4. Under the partial equity method, the parent recognizes income when Difficulty: Easy 5. Push-down accounting is concerned with the A. Impact of the purchase on the subsidiary's financial statements B. Recognition of goodwill by the parent C. Correct consolidation of the financial statements D. Impact of the purchase on the separate financial statements of the parent E. Recognition of dividends received from the subsidiary Difficulty: Medium 6. Racer Corp. purchased all of the common stock of Tangiers Co. several years ago. Tangiers maintained its incorporation. Balances in which of Racer's accounts would vary between the equity method and the initial value method? Difficulty: Hard 3-2
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Chapter 03 - Consolidations - Subsequent to the Date of Acquisition
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