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ACC 410 QUIZ 4 (3)

ACC 410 QUIZ 4 (3)

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Author: Christine Farr
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In a business combination accounted for as an acquisition, how should the excess of fair value of identifiable net assets acquired over implied value be treated?

On January 1, 2013, Lester Company purchased 70% of Stork Corporation's $5 par common stock for $600,000. The book value of Stork net assets was $640,000 at that time. The fair value of Stork's identifiable net assets were the same as their book value except for equipment that was $40,000 in excess of the book value. In the January 1, 2013, consolidated balance sheet, goodwill would be reported at

Primer Company acquired an 80% interest in SealCoat Company on January 1, 2013, for $450,000 cash when SealCoat Company had common stock of $250,000 and retained earnings of $250,000. All excess was attributable to plant assets with a 10-year life. SealCoat Company made $50,000 in 2013 and paid no dividends. Primer Company’s separate income in 2013 was $625,000. The controlling interest in consolidated net income for 2013 is:

The SEC requires the use of push down accounting when the ownership change is greater than

Goodwill represents the excess of the implied value of an acquired company over the

In preparing consolidated working papers, beginning retained earnings of the parent company will be adjusted in years subsequent to acquisition with an elimination entry whenever:

If the fair value of the subsidiary's identifiable net assets exceeds both the book value and the value implied by the purchase price, the workpaper entry to eliminate the investment account

Simple Company, a 70%-owned subsidiary of Punter Corporation, reported net income of $240,000 and paid dividends totaling $90,000 during Year 3. Year 3 amortization of differences between current fair values and carrying amounts of Simple's identifiable net assets at the date of the business combination was $45,000. The noncontrolling interest in net income of Simple for Year 3 was

Pinta Company acquired an 80% interest in Strummer Company on January 1, 2013, for $270,000 cash when Strummer Company had common stock of $150,000 and retained earnings of $150,000. All excess was attributable to plant assets with a 10-year life. Strummer Company made $30,000 in 2013 and paid no dividends. Pinta Company’s separate income in 2013 was $375,000. Controlling interest in consolidated net income for 2013 is:

When the implied value exceeds the aggregate fair values of identifiable net assets, the residual difference is accounted for as

Under push down accounting, the workpaper entry to eliminate the investment account includes a

Under which set of circumstances would it not be appropriate to assume the value the noncontrolling shares is the same as the controlling shares?

On November 30, 2013, Piani Incorporated purchased for cash of $25 per share all 400,000 shares of the outstanding common stock of Surge Company. Surge 's balance sheet at November 30, 2013, showed a book value of $8,000,000. Additionally, the fair value of Surge's property, plant, and equipment on November 30, 2013, was $1,200,000 in excess of its book value. What amount, if any, will be shown in the balance sheet caption "Goodwill" in the November 30, 2013, consolidated balance sheet of Piani Incorporated, and its wholly owned subsidiary, Surge Company?

Sleepy Company, a 70%-owned subsidiary of Pickle Corporation, reported net income of $600,000 and paid dividends totaling $225,000 during Year 3. Year 3 amortization of differences between current fair values and carrying amounts of Sleepy's identifiable net assets at the date of the business combination was $112,500. The noncontrolling interest in consolidated net income of Sleepy for Year 3 was

Dividends declared by a subsidiary are eliminated against dividend income recorded by the parent under the


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