Question;CHAPTER 1;Intercorporate Acquisitions and Investments in Other Entities;1. On April 1, 2012, Jack Company paid $800,000 for all of;Ann Corporation's issued and outstanding common stock. Ann's recorded assets;and liabilities on April 1, 2012, were as follows;On April 1, 2012, Ann's inventory was determined to have a;fair value of $190,000 and the property and equipment had a fair value of;$560,000. What is the amount of goodwill resulting from the business;combination?;a);$0.;b);$50,000.;c);$150,000.;d);$180,000.;2. Topper Company established a subsidiary and;transferred equipment with a fair value of $72,000 to the subsidiary. Topper;had purchased the equipment with an expected life of 10 years four years;earlier for $100,000 and has used straight-line depreciation with no expected;residual value. At the time of the transfer, the subsidiary should record;a) Equipment at $72,000, and no accumulated;depreciation.;b) Equipment at $60,000, and no accumulated;depreciation.;c) Equipment at $100,000, and accumulated;depreciation of $40,000.;d) Equipment at $120,000, and accumulated;depreciation of $48,000.;3. Lead;Corporation established a new subsidiary and transferred to it assets with a;cost of $90,000 and a book value of $75,000. The assets had a fair value of;$100,000 at the time of transfer. The transfer will result in;a) A reduction of net assets reported by Lead;Corporation of $90,000.;b) A reduction of net assets reported by Lead;Corporation of $75,000.;c) No change in the reported net assets of;Lead Corporation.;d);An increase in the net assets reported by;Lead Corporation of $25,000.;4. Tear Company, a newly established subsidiary of Stern;Corporation, received assets with an original cost of $260,000, a fair value;of $200,000, and a book value of $140,000 from the parent in exchange for;7,000 shares of Tear's $8 par value common stock. Tear should record;a);Additional paid-in capital of $0.;b);Additional paid-in capital of $84,000.;c);Additional paid-in capital of $144,000.;d);Additional paid-in capital of $204,000;5. Twill Company has a reporting unit with the fair value;of its net identifiable assets of $500,000. The carrying value of the;reporting unit's net assets on Twill's books is $575,000, which includes;$90,000 of goodwill. The fair value of the reporting unit is $560,000. Twill;should report impairment of goodwill of;a);$60,000.;b);$30,000.;c);$15,000.;d);$0.;Following its acquisition;of the net assets of Dan Company, Empire Company assigned goodwill of $60,000;to one of the reporting divisions. Information for this division follows;6. Based on the preceding information;what amount of goodwill will be reported for this division if its fair value is;determined to be $200,000?;A. $0;B. $60,000;C. $30,000;D. $10,000;7. Based;on the preceding information, what amount of goodwill impairment will be;recognized for this division if its fair value is determined to be;$195,000?;A. $5,000;B. $30,000;C. $60,000;D. $55,000;8. Based;on the preceding information, what amount of amount of goodwill impairment will;be recognized for this division if its fair value is determined to be;$245,000?;A. $0;B. $30,000;C. $60,000;D. $55,000;9. Plummet Corporation reported the book value;of its net assets at $400,000 when Zenith Corporation acquired 100 percent;ownership. The fair value of Plummet's net assets was determined to be $510,000;on that date. What amount of goodwill will be reported in consolidated;financial statements presented immediately following the combination;if Zenith paid $550,000 for the acquisition?;A. $0;B. $50,000;C. $150,000;D. $40,000;10. In a business combination, the fair values;of the net identifiable assets acquired exceeds the fair value of the;consideration given. The excess should be reported as a;a);Deferred credit;b);Reduction of the;values assigned to current assets and a deferred credit for any unallocated;portion.;c);Pro rata reduction of;the values assigned to current and noncurrent assets and a deferred credit for;any unallocated portion.;d);No answer listed is;correct.
Paper#40916 | Written in 18-Jul-2015Price : $22