nVisit Below Link, To Download This Course:nnhttps://www.tutorialsservice.net/product/acct-405-week-5-quiz-latest/nnOr nEmail us onnSUPPORT@TUTORIALSSERVICE.NETnnACCT 405 Week 5 Quiz LatestnACCT405nACCT 405 Week 5 Quiz LatestnQuestion 1 (TCO 3)nParent sold land to its subsidiary for a gain in 20Ã—1. The subsidiary sold the land externally for a gain in 20Ã—3. Which of the following statements is true?nâ€¢ A gain will be reported on the consolidated income statement in 20Ã—1.nâ€¢ A gain will be reported on the consolidated income statement in 20Ã—3.nâ€¢ No gain will be reported on the 20Ã—3 consolidated income statement.nâ€¢ Only the parent company will report a gain in 20Ã—3.nâ€¢ The subsidiary will report a gain in 20Ã—1.n
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ACCT 405 Week 5 Quiz Latest
ACCT 405 Week 5 Quiz Latest
Question 1 (TCO 3)
Parent sold land to its subsidiary for a gain in 20×1. The subsidiary sold the land externally for a gain in
20×3. Which of the following statements is true?
A gain will be reported on the consolidated income statement in 20×1.
A gain will be reported on the consolidated income statement in 20×3.
No gain will be reported on the 20×3 consolidated income statement.
Only the parent company will report a gain in 20×3.
The subsidiary will report a gain in 20×1.
Question 2 (TCO 3)
During 20×1, Vonsamek Co. sold inventory to its wholly owned subsidiary, Link Co. The inventory cost
$30,000 and was sold to Link for $44,000. From the perspective of the combination, when is the $14,000
When the goods are sold to a third party by Link
When Link pays Vonsamek for the goods
When Vonsamek sold the goods to Link
When the goods are used by Link
Question 3 (TCO 3)
Pop Co. owns 80% of Cool Co., common stock par value $10. On January 1, 20×1, Cool Co. issued
10,000 additional shares of common stock for $35 per share. Pop Co. acquired 8,000 of these shares.
How would this transaction affect the additional paid-in capital of the parent company?
Increase it by $28,700
Increase it by $200,000
Increase it by $280,000
Increase it by $250,000
Question 4 (TCO 3)
Where do dividends paid to the noncontrolling interest of a subsidiary appear on a consolidated statement
of cash flows?
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Supplemental schedule of noncash investing and financing activities
Not on the consolidated statement of cash flows
Question 5 (TCO 3)
During 20×1, Play Inc. acquired 100% of Stray Inc. by issuing 250,000 shares of its common stock. The
acquisition was announced on March 31, 20×1, when Play’s common stock was selling for $45 per share,
and finalized on October 15, 20×1, when the market price of Play’s common stock was $50 per share. On
October 15, 20×1, Stray’s net assets had a book value of $10,750,000. Book value equaled fair value for
all recognized assets and liabilities, except land, which had a fair value $500,000 higher than book value.
Stray also had unpatented technology with a fair value of $225,000 and in-process research and
development with a fair value of $365,000. Which is the goodwill to be reported on Play Inc.’s December
31, 20×1, balance sheet under U.S. GAAP?