Exam1_ solutions

# Compute the consolidated common stock account at x1 a

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30. Compute the consolidated common stock account at December 31, 20X1. A. \$1,080 B. \$1,480 C. \$1,380 D. \$2,280 E. \$2,680 31. Assuming the combination is accounted for as a purchase, compute the consolidated retained earnings at December 31, 20X1. 32. Assuming the combination is accounted for as an acquisition, compute the consolidated retained earnings at December 31, 20X1.

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33. Under the partial equity method of accounting for an investment, 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
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? 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 37. Consolidated net income using the equity method under a n acquisition combination is computed as follows:

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