Chapter 5 Of Acc 401

25 Questions  I  By Jselig83 on March 13, 2012
EXAM 2 for ACC 401

  
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1.  On the consolidated statement of cash flows, cash received from intercompany sales between the parent and subsidiary are:
A.
B.
C.
D.
2.  X Company has no equity ownership in Y Company, but is its primary beneficiary.  X and Y were previously under common control.  Which statement is true at the date X becomes Y’s primary beneficiary?
A.
B.
C.
D.
3.  Which statement is true concerning valuation of noncontrolling interests at the date of acquisition per U.S. GAAP?
A.
B.
C.
D.
4.  Where is the noncontrolling interest in consolidated net income reported?
A.
B.
C.
D.
5.  A parent owns 80% of a subsidiary’s voting stock.  On the consolidated balance sheet, at what value is consolidated intangible assets reported?
A.
B.
C.
D.
6.  On the consolidated statement of cash flows, where should dividends paid to noncontrolling shareholders appear?
A.
B.
C.
D.
7.  Which statement is false concerning a bargain purchase with noncontrolling interest, at the date of acquisition?
A.
B.
C.
D.
8.  Assume a parent acquires 75% of the stock of a subsidiary, in an acquisition in which goodwill is reported.  If goodwill is not impaired, on the consolidated income statement the noncontrolling interest in net income as measured by U.S. GAAP is:
A.
B.
C.
D.
9.  On the consolidated statement of cash flows, cash dividends paid to the shareholders of the parent company are:
A.
B.
C.
D.
10.  Which is the best measure of fair value per share for the noncontrolling interest in a subsidiary at the date of acquisition, if the subsidiary’s stock is actively traded?
A.
B.
C.
D.
11.  A parent owns 85% of a subsidiary’s voting stock, in an acquisition accounted for as a bargain purchase.  The subsidiary had previously unreported identifiable intangible assets valued at $10,000,000 on the date of acquisition.  Which statement is true concerning consolidation eliminations at the date of acquisition?
A.
B.
C.
D.
12.  Which statement is true concerning the consolidated statement of cash flows?
A.
B.
C.
D.
13.  Noncontrolling interest is reported on the consolidated financial statements as:
A.
B.
C.
D.
14.  A parent owns less than 100% of the voting stock of its subsidiary.  On its consolidated income statement, earnings per share is calculated using which of the following amounts in the numerator?
A.
B.
C.
D.
15.  Noncontrolling interest is reported on the consolidated financial statements as:
A.
B.
C.
D.
16.  As compared with past practice, SFAS 160 requirements for displaying noncontrolling interests in the consolidated income statement:
A.
B.
C.
D.
17.  A bargain purchase consolidation differs from a normal consolidation in which elimination entry or entries?
A.
B.
C.
D.
18.  X Company has no equity ownership in Y Company, but is its primary beneficiary.  X and Y were not previously under common control.  Which statement is true at the date X becomes Y’s primary beneficiary?
A.
B.
C.
D.
19.  IFRS allows an alternative method for valuing the acquired subsidiary’s goodwill.  When is U.S. GAAP and IFRS valuation the same regardless of which valuation method is used under IFRS?
A.
B.
C.
D.
20.  In the operating section of the consolidated statement of cash flows, using the indirect method, all but which one of the following might appear?
A.
B.
C.
D.
21.  Which statement is correct concerning consolidation eliminating entries for a bargain purchase, in subsequent years, when there is a 5% noncontrolling interest?
A.
B.
C.
D.
22.  P acquires 90% of S’s voting stock.  At the date of acquisition, S’s net assets are carried at amounts approximating fair value, but S has previously unreported leaseholds with a fair value of $20,000,000, 5-year life.  Elimination R credits the noncontrolling interest in equity in the amount of
A.
B.
C.
D.
23.  An acquired company’s assets all have fair values greater than book values.  When compared with an acquisition with goodwill, an acquisition reported as a bargain purchase generally results in:
A.
B.
C.
D.
24.  An acquirer buys 75% of the stock of a target company for a price well in excess of the target’s book value.  The target company’s assets and liabilities are determined to be fairly reported on the target company’s books, and it does not have any previously unrecorded intangibles.  The acquirer is a non-U.S. company that reports using IFRS.  It uses the alternative valuation method for noncontrolling interests that is not allowed under U.S. GAAP.  Which statement is true?
A.
B.
C.
D.
25.  U.S. GAAP and IFRS can differ on valuation of noncontrolling interests on the consolidated balance sheet.  Assume a parent owns 90% of a subsidiary, acquired several years ago.  Which statement is true?
A.
B.
C.
D.
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