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Misc. Accounting MCQs

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Question;1-What is a basic premise of the acquisition method regarding accounting for a noncontrolling interest?;A subsidiary is an indivisible part of a business combination and should be included in its entirety regardless of the degree of ownership. Consolidated financial statements should be produced only if both the parent and the subsidiary are in the same basic industry. Consolidated financial statements should be primarily for the benefit of the parent company?s stockholders. Consolidated financial statements should not report a noncontrolling interest balance because these outside owners do not hold stock in the parent company.;2. On January 1, 2012, Chamberlain Corporation pays $481,600 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $24,700 results from the acquisition. On December 31, 2013, Neville reports revenues of $512,000 and expenses of $386,000 and Chamberlain reports revenues of $754,000 and expenses of $430,000. The parent figures contain no income from the subsidiary. What is consolidated net income attributable to the controlling interest?$409.480$425,300$384,780$512,000;3. On April 1, Pujols, Inc., exchanges $592,500 fair-value consideration for 70 percent of the outstanding stock of Ramirez Corporation. The remaining 30 percent of the outstanding shares continued to trade at a collective fair value of $212,500. Ramirez?s identifiable assets and liabilities each had book values that equaled their fair values on April 1 for a net total of $635,000. During the remainder of the year, Ramirez generates revenues of $653,000 and expenses of $374,000 and paid no dividends. On a December 31 consolidated balance sheet, what amount should be reported as noncontrolling interest?$274,200$296,200$275,275$337,630;4. Willkom Corporation bought 100 percent of Szabo, Inc., on January 1, 2011. On that date, Willkom?s equipment (10-year life) has a book value of $477,500 but a fair value of $602,500. Szabo has equipment (10-year life) with a book value of $253,000 but a fair value of $378,000. Willkom uses the equity method to record its investment in Szabo. On December 31, 2013, Willkom has equipment with a book value of $334,250 but a fair value of $479,750. Szabo has equipment with a book value of $177,100 but a fair value of $337,300. What is the consolidated balance for the Equipment account as of December 31, 2013?$511,350$636,350 $817.050$598,850

 

Paper#44592 | Written in 18-Jul-2015

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