Answers to Exam 2 Form B Summer I 2009

Answers to Exam 2 Form B Summer I 2009 - Stockholders’...

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Accounting 401 Answers Exam 2 – Form B Summer I 2009 Part I – Multiple Choice 1. d 2. d 3. c 4. e 5. a 6. e 7. a 8. a 9. b 10.c Part II 1. Noncontrolling interest is $160,000 (240,000/0.6) x 0.40 2. Consolidated balance for the building is $150,000 Use building’s fair value. 3. Consolidated revenues are $200,000 All revenues should be reported. 4. Annual excess amortization is $16,800 67,200/4 5. Consolidated goodwill is $50,600 Cost $969,000 80% of fair value of net identifiable assets 918,400
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Goodwill $50,600 Part III 1. B 2. B 3. A 4. A (purchase method does not use implied values) 5. A 2. Consolidated elimination entries: (1) Equity in subsidiary earnings 228,000 Dividends – Sub 38,000 Investment in Subsidiary 190,000 (2) Common stock – Sub 360,000 Additional paid-in capital - Sub 40,000 Retained earnings – Sub 420,000 (250,000 + 200,000 – 30,000) Investment in Subsidiary 779,000 Noncontrolling interest 41,000 (3) Noncontrolling interest in net income 12,000 Dividends – Sub 2,000 Noncontrolling interest 10,000
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Part IV 1. Consolidated elimination entries: Parent Company Theory
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Unformatted text preview: Stockholders’ equity – Sub 1,200 Assets – Sub (1,600 x 0.60) 960 Goodwill ([3000 – (2,400 x 0.60)] 1,560 Liabilities (400 x 0.60) 240 Investment in Subsidiary 3,000 Noncontrolling interest 480 Economic Unit Concept/Full Goodwill Stockholders’ equity – Sub 1,200 Assets – Sub 1,600 Goodwill (3000/0.6) – 2,400 2,600 Liabilities 400 Investment in Subsidiary 3,000 Noncontrolling interest 2,000 Economic Unit Concept/Purchased Goodwill Stockholders’ equity – Sub 1,200 Assets – Sub 1,600 Goodwill 1,560 Liabilities 400 Investment in Subsidiary 3,000 Noncontrolling interest 960 2. Schedule to determine Investment in Aaron Company Acquisition – 1/1 2009 $187,000 2009 income 132,000 2009 dividends (60,000) Amortization of fair value differences (7,300) Balance – 12/31/2009 $251,700 2010 income 156,000 2010 dividends (50,000) Amortization of fair value differences (7,300) Balance – 12/31/2010 $350,400...
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This note was uploaded on 03/09/2012 for the course ACCT 401 taught by Professor Staff during the Summer '08 term at Texas A&M.

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Answers to Exam 2 Form B Summer I 2009 - Stockholders’...

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