42 perry company acquires 100 of the stock of hurley

42. Perry Company acquires 100% of the stock of Hurley Corporation on January 1,
2012, for $3,800 cash. As of that date Hurley has the following trial balance;
Any excess of consideration transferred over fair value of net assets acquired is
considered goodwill with an indefinite life. FIFO inventory valuation method is used.
Compute the amount of Hurley's buildings that would be reported in a December
31, 2012, consolidated balance sheet.
A. $1,56
0.
B. $1,26
0.
C. $1,44
0.
D. $1,16
0.
E. $1,14
0.
FV $1,200 + Excess Amortization ($300/5) $60 = $1,260
AACSB: Analytic
AICPA BB: Critical Thinking

AICPA FN: Measurement
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 03-01 Recognize the complexities in preparing consolidated financial reports that emerge
from the passage of time.
Learning Objective: 03-04 Understand that a parent's internal accounting method for its subsidiary investments
has no effect on the resulting consolidated financial statements.
Topic: Consolidation - The Effects Created By The Passage of Time
Topic: Subsequent Consolidation

43. Perry Company acquires 100% of the stock of Hurley Corporation on January 1,
2012, for $3,800 cash. As of that date Hurley has the following trial balance;
Any excess of consideration transferred over fair value of net assets acquired is
considered goodwill with an indefinite life. FIFO inventory valuation method is used.
Compute the amount of Hurley's equipment that would be reported in a December
31, 2012, consolidated balance sheet.
AACSB: Analytic
AICPA BB: Critical Thinking

AICPA FN: Measurement
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 03-01 Recognize the complexities in preparing consolidated financial reports that emerge
from the passage of time.
Learning Objective: 03-04 Understand that a parent's internal accounting method for its subsidiary investments
has no effect on the resulting consolidated financial statements.
Topic: Consolidation - The Effects Created By The Passage of Time
Topic: Subsequent Consolidation

44. Perry Company acquires 100% of the stock of Hurley Corporation on January 1,
2012, for $3,800 cash. As of that date Hurley has the following trial balance;
Any excess of consideration transferred over fair value of net assets acquired is
considered goodwill with an indefinite life. FIFO inventory valuation method is used.
Compute the amount of total expenses reported in an income statement for the
year ended December 31, 2012, in order to recognize acquisition-date allocations
of fair value and book value differences,
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Apply

Difficulty: 2 Medium
Learning Objective: 03-01 Recognize the complexities in preparing consolidated financial reports that emerge
from the passage of time.