chap004 - Multiple Choice Questions 1. A noncontrolling...

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Multiple Choice Questions 1. A noncontrolling interest is most likely to be shown as part of equity under the A) partial equity concept. B) Proportionate consolidation concept. C) economic unit concept. D) parent company concept. E) proprietary concept. Answer: C Difficulty: Easy Use the following to answer questions 2-4: When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair market value of $100,000. 2. What amount should have been reported for the land on a consolidated balance sheet, assuming the economic unit concept was used? A) $ 70,000 B) $ 75,000 C) $ 85,000 D) $ 92,500 E) $100,000 Answer: E Difficulty: Easy 3. What amount should have been reported for the land on a consolidated balance sheet, assuming the proportionate consolidation concept was used? A) $ 70,000 B) $ 75,000 C) $ 85,000 D) $ 92,500 E) $100,000 Answer: B Difficulty: Easy
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4. What amount should have been reported for the land on a consolidated balance sheet, assuming the parent company concept was used? A) $ 70,000 B) $ 75,000 C) $ 85,000 D) $ 92,500 E) $100,000 Answer: D Difficulty: Easy Use the following to answer questions 5-10: Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair market value of Float's net assets was $1,850,000, and the book value was $1,500,000. 5. What amount of goodwill should have been recognized according to the economic unit concept ? A) $150,000 B) $250,000 C) $ –0– D) $120,000 E) $170,000 Answer: A Difficulty: Easy 6. What amount of goodwill should have been recognized according to the proportionate consolidation concept ? A) $150,000 B) $250,000 C) $ –0– D) $120,000 E) $170,000 Answer: D Difficulty: Medium
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7. What amount of goodwill should have been recognized according to the parent company concept ? A) $150,000 B) $250,000 C) $ –0– D) $120,000 E) $170,000 Answer: D Difficulty: Medium 8. What is the dollar amount of noncontrolling interest which should appear on a balance sheet prepared immediately after consolidation according to the economic unit concept ? A) $350,000 B) $300,000 C) $400,000 D) $250,000 E) $ –0– Answer: C Difficulty: Medium 9. What is the dollar amount of noncontrolling interest which should appear on a balance sheet prepared immediately after consolidation according to the proportionate consolidation concept ? A) $350,000 B) $300,000 C) $400,000 D) $250,000 E) $ –0– Answer: E Difficulty: Easy 10. What is the dollar amount of noncontrolling interest which should appear on a balance sheet prepared immediately after consolidation according to the parent company concept ? A) $350,000 B) $300,000 C) $400,000 D) $250,000 E) $ –0– Answer: B Difficulty: Medium
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Use the following to answer questions 11-12: Femur Co. owns 70% of the voting common stock of Harbor Corp. During 2003, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of goodwill and allocations totaled $60,000 in 20030. Femur Co. decided to use the
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chap004 - Multiple Choice Questions 1. A noncontrolling...

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