| Read 'Chapter 1: Business Combinations' & answer the following question(s): |
| 1. | The pooling of interests method was eliminated |
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| 2. | The purchase method is no longer acceptable for new business combinations having fiscal years beginning after |
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| 3. | Which of the following is NOT a reason for a company to expand through a combination, rather than by building new facilities? |
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| 4. | The two new standards reflected in the Codification as ASC 805, Business Combinations, and ASC 810, Consolidation, which require prospective treatment for business combinations having fiscal years beginning after December 15, 2008, mandate what is referred to as the |
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| 5. | Historically, much of the controversy concerning accounting requirements for business combinations involved the ________ method. |
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| 6. | A statutory merger differs from a statutory consolidation because |
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| 7. | Durer Inc. acquired Sea Corporation in a business combination and Sea Corp went out of existence. Sea Corp developed a patent listed as an asset on Sea Corp's books at the patent office filing cost. In recording the combination, |
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| 8. | In a business combination, which of the following will occur? |
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| 9. | Pepper Company paid $2,500,000 for the net assets of Salt Corporation and Salt was then dissolved. Salt had no liabilities. The fair values of Salt's assets were $3,750,000. Salt's only non-current assets were land and buildings with book values of $100,000 and $520,000, respectively, and fair values of $180,000 and $730,000, respectively. At what value will the buildings be recorded by Pepper? |
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| 10. | Under the acquisition method, in a business combination, when the fair value of net assets acquired exceeds the fair value of consideration transferred, which of the following statements is correct? |
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| 11. | With respect to goodwill, an impairment |
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| 12. | Picasso Co. issued 5,000 shares of its $1 par common stock, valued at $100,000, to acquire shares of Seurat Company in an all-stock transaction. Picasso paid the investment bankers $35,000 and will treat the investment banker fee under the acquisition method as |
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| 13. | According to Accounting Standards Update (ASU) No. 2010-22 (August 2010), Accounting for Various Topics, fees to an investment banker for underwriting services related to a business combination or purchase of an asset should be |
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| 14. | Push-down accounting |
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| 15. | According to the acquisition method, liabilities assumed in an acquisition will be valued at the ________. |
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| 16. | Under the acquisition method, Bargain purchases |
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| 17. | Under the acquisition method, in process R&D costs are |
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| 18. | Under Accounting Standards Update (ASU) No. 2010-29 in December 2010, if a calendar year-end company completed a business combination in April 2X13, disclosures would be provided as if the business combination occurred |
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| Read 'Chapter 2: Consolidated Financial Reporting' & answer the following question(s): |
| 19. | A parent corporation owns 55% of the outstanding voting common stock of one domestic subsidiary. The parent has control over the subsidiary. Which of the following statements is correct? |
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| 20. | A subsidiary can be excluded from consolidation if |
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| 21. | Pregler Inc. has 70% ownership of Sach Company, but should exclude Sach from its consolidated financial statements if |
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| 22. | Subsequent to an acquisition, the parent company and consolidated financial statement amounts would NOT be the same for |
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| 23. | A newly acquired subsidiary had pre-existing goodwill on its books. The parent company's consolidated balance sheet will |
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| 24. | Noncontrolling (minority) shareholders’ interests |
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| 25. | Panini Corporation owns 85% of the outstanding voting stock of Strathmore Company and Malone Corporation owns the remaining 15% of Strathmore's voting stock. On the consolidated financial statements of Panini Corporation and Strathmore, Malone is |
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| 26. | On June 1, 2X13, Puell Company acquired 100% of the stock of Sorrell Inc. On this date, Puell had Retained Earnings of $100,000 and Sorrell had Retained Earnings of $50,000. On December 31, 2X13, Puell had Retained Earnings of $120,000 and Sorrell had Retained Earnings of $60,000. The amount of Retained Earnings that appeared in the December 31, 2X13 consolidated balance sheet was |
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| 27. | Perth Corporation acquired a 100% interest in Sansone Company for $1,600,000 when Sansone had no liabilities. The book values and fair values of Sansone's assets were: BOOK VALUES: Current Assets = $350,000; Equipment = $150,000, Land and Buildings = $570,000, Total Assets = $1,070,000. FAIR VALUE: Current Assets = $400,000; Equipment = $210,000, Land and Buildings = $590,000, Total Assets = $1,200,000. Immediately following the acquisition, equipment will be included on the consolidated balance sheet at |
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| 28. | At the beginning of 2X13, Parling Food Services acquired a 90% interest in Simmons' Orchards when Simmons' book values of identifiable net assets equaled their fair values. On December 26, 2X13, Simmons declared dividends of $50,000, and the dividends were unpaid at year-end. Parling had not recorded the dividend receivable at December 31. A consolidated working paper entry is necessary to |
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| 29. | On consolidated working papers, a subsidiary's net income is |
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| 30. | When performing a consolidation, if the balance sheet does not balance, |
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| 31. | Under the purchase method, |
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| 32. | The accounting for noncontrolling interests (ASC 810-10-65-1A) is to be applied prospectively for fiscal years beginning |
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| 33. | Which of the following statements is NOT true? |
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| 34. | Which of the following items should be treated in the same manner in both combined financial statements and consolidated statements? I) Different Fiscal Periods, II) Foreign Operations |
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| 35. | In the preparation of consolidated financial statements, which of the following intercompany transactions must be eliminated as part of the preparation of the consolidation working papers? |
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