Exam1_ solutions

A 2850 b 3450 c 2400 d 2800 e 2810 32 assuming the

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A. $2,850 B. $3,450 C. $2,400 D. $2,800 E. $2,810 32. Assuming the combination is accounted for as an acquisition, compute the consolidated retained earnings at December 31, 20X1. A. $2,800 B. $2,825 C. $2,850 D. $3,425 E. $3,450
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33. Under the partial equity method of accounting for an investment, A. The investment account remains at initial value B. Dividends received are recorded as revenue C. Amortization of the excess of fair value allocations over book value of net assets is applied over their useful lives to reduce the investment account D. Amortization of the excess of fair value allocations over book value is ignored in regard to the investment account E. Dividends received increase the investment account 34. When a company applies the partial equity method in accounting for its investment in a subsidiary and the subsidiary's equipment has a fair value greater than its book value, what consolidation worksheet entry is made in a year subsequent to the initial acquisition of the subsidiary? A. A above B. B above C. C above D. D above E. E above
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35. When a company applies the partial equity method in accounting for its investment in a subsidiary and initial value, book values and fair values of net assets are all equal, what consolidation worksheet entry would be made? A. A above B. B above C. C above D. D above E. E above 36. Hoyt Corporation agreed to the following terms in order to acquire the net assets of Brown Company on January 1, 2009: (1.) To issue 400 shares of common stock ($10 par) with a fair value of $45 per share. (2.) To assume Brown's liabilities which have a fair value of $1,500. On the date of acquisition, the consideration transferred for Hoyt's acquisition of Brown would be A. $18,000 B. $16,500 C. $20,000 D. $18,500 E. $19,500 37. Consolidated net income using the equity method under a n acquisition combination is computed as follows: A. Parent company's income from its own operations plus the equity from subsidiary's income recorded by the parent B. Parent's reported net income C. Combined revenues less combined expenses less equity in subsidiary's income less amortization of fair value allocations in excess of book value D. Parent's revenues less expenses for its own operations plus the equity from subsidiary's income recorded by parent E. All of the above
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Use the following to answer Questions 38 and 48: Perry Company obtains 100% of the stock of Hurley Corporation on January 1, 2009, for $3,800 cash. As of that date Hurley has the following trial balance; Any excess of consideration transferred over fair value is considered goodwill with an indefinite life. FIFO inventory valuation method is used. 38. Compute the consideration transferred in excess of book value at January 1, 2009. A. $150 B. $700 C. $2,200 D. $550 E. $2,900
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39. Compute goodwill, if any, at January 1, 2009. A. $150 B. $250 C. $700 D. $1,200 E. $550 40. Compute the amount of Hurley's inventory that would be reported on a January 1, 2009, consolidated balance sheet. A. $800 B. $100 C. $900 D. $150 E. $0 41. Compute the amount of Hurley's buildings that would be reported on a December 31, 2009, consolidated balance sheet. A.
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A 2850 B 3450 C 2400 D 2800 E 2810 32 Assuming the...

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