TestmBankmformAdvancedmAccountingm11thmmEdi

TestmBankmformAdvancedmAccountingm11thmmEdi tionmHoyle,mSchaefer,mDoupnik

MultiplemChoicemQuestions

• Atmthemdatemofmanmacquisitionmwhichmismnotmambargainmpurchase,mth

emacquisitionmmethod

• consolidatesmthemsubsidiary'smassetsmatmfairmvaluemandmthemliabilitiesma

tmbookmvalue.

• consolidatesmallmsubsidiarymassetsmandmliabilitiesma

tmbookmvalue.

• consolidatesmallmsubsidiarymassetsmandmliabilitiesmat

mfairmvalue.

• consolidatesmcurrentmassetsmandmliabilitiesmatmbookmvalue,mlong-

termmassetsmandmliabilitiesmatmfairmvalue.

• consolidatesmthemsubsidiary'smassetsmatmbookmvaluemandmthemliabilities

matmfairmvalue. 1 / 4

Fullmfilematmhttps://testbankscafe.eu

/

• Inmanmacquisitionmwheremcontrolmismachieved,mhowmwouldmthemlandm

accountsmofmthemparentmandmthemlandmaccountsmofmthemsubsidiarymb emcombined?

• Optionm

A

• Option

mB

• Option

mC

• Option

mD

• Option

mE

• LisamCo.mpaidmcashmformallmofmthemvotingmcommon mstockmofmVictoriamCorp

.mVictoriamwillmcontinuemtomexistmasmamseparatemcorporation.mEntriesmformt hemconsolidationmofmLisamandmVictoriamwouldmbemrecordedmin

• amworksheet

.

• Lisa'smgeneral

mjournal.

• Victoria'smgeneral

mjournal.

• Victoria'smsecretmconsolidation

mjournal.

• themgeneralmjournalsmofmbot

hmcompanies. 2 / 4

• Usingmthemacquisitionmmethodmformambusinessmcombination,mgoodwillmi

smgenerallymdefinedmas:

• Costmofmtheminvestmentmlessmthemsubsidiary'smbookmvaluematmthe

mbeginningmofmthemyear.

• Costmofmtheminvestmentmlessmthemsubsidiary'smbookmvaluematmthe

macquisitionmdate.

• Costmofmtheminvestmentmlessmthemsubsidiary'smfairmvaluematmthe

mbeginningmofmthemyear.

• Costmofmtheminvestmentmlessmthemsubsidiary'smfairmvaluemat

macquisitionmdate.

• ismnomlongermallowedmunder

mfederalmlaw.

• Directmcombinationmcostsmandmstockmissuancemcostsmaremoftenmincurredmi

nmthemprocessmofmmakingmamcontrollingminvestmentminmanothermcompany.mHowmshouldmthosemcostsmbemaccountedmforminmampre- 2009mpurchasemtransaction?

• Optionm

A

• Option

mB

• Option

mC

• Option

mD

• Option

mE 3 / 4

Fullmfilematmhttps://testbankscafe.eu

/

• Howmaremdirectmandmindirectmcostsmaccountedmformwhenmapplyingmth

emacquisitionmmethodmformambusinessmcombination?

• Optionm

A

• Option

mB

• Option

mC

• Option

mD

• Option

mE

• Whatmismthemprimarymaccountingmdifferencembetweenmaccountingmform

whenmthemsubsidiarymismdissolvedmandmwhenmthemsubsidiarymretainsmits mincorporation?

• Ifmthemsubsidiarymismdissolved,mitmwillmnotmbemoperatedmasm

amseparatemdivision.

• Ifmthemsubsidiarymismdissolved,massetsmandmliabilitiesmaremconsolidate

dmatmtheirmbookmvalues.

• Ifmthemsubsidiarymretainsmitsmincorporation,mtheremwillmbemnomgoodwil

lmassociatedmwithmthemacquisition.

• Ifmthemsubsidiarymretainsmitsmincorporation,massetsmandmliabilitiesmar

emconsolidatedmatmtheirmbookmvalues.

• Ifmthemsubsidiarymretainsmitsmincorporation,mthemconsolidationmismno

tmformallymrecordedminmthemaccountingmrecordsmofmthemacquiringmc ompany.

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