ACC 577 Final Exam Guide
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ACC 577 Final Exam Study
Question 1
At the time Company P acquired controlling interest of Company S the following accounts and balances existed on the books of the two companies: Which one of the following amounts should be eliminated in preparing a consolidated balance sheet immediately following the business combination?
Question 2
In which one of the following cases will a non-cash asset transferred as consideration in a business combination be measured at carrying value, not at fair value?
Question 3
On January 1, 200x Ritt Corp. purchased 80% of Shaw Corp.'s $10 par common stock for $975,000. On this date, the carrying amount of Shaw's net assets was $1,000,000. The fair values of Shaw's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net) which were $100,000 in excess of the carrying amount. On that date, the fair value of the 20% non controlling interest in Shaw was appropriately determined to be $200,000. For the year ended December 31, 200x, Shaw had net income of $190,000 and paid cash dividends totaling $125,000. In the January 1, 200x consolidated balance sheet, goodwill should be reported at
Question 4
On December 31, 1988, Saxe Corporation was merged into Poe Corporation. In the business combination, Poe issued 200,000 shares of its $10 par common stock, with a market price of $18 a share, for all of Saxe's common stock. The stockholders' equity section of each company's balance sheet immediately before the combination was: Assume that the merger is accounted for using the acquisition method of accounting. December 31, 1988 additional paid-in capital should be reported at
Question 5
Scroll, Inc., a wholly owned subsidiary of Pirn, Inc., began