Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

problem 1: Which of the following statements is true?

a) A parent company’s consolidated financial statements would the same regardless of whether it uses the cost or equity method to recover the subsidiary.
b) A parent company that uses the cost method will have consolidated financial statements that differ from those using the equity method.
c) The consolidated net income for a parent company that used the cost method would be higher than if the company used the equity method.
d) The consolidated net income for a parent company that used the cost method would be lower than if the company used the equity method.

problem 2
: Intercompany profits in assets are recognized in the consolidated financial statements when:

a) The contract for the sale of the assets is signed between the parent and subsidiary companies.
b) The assets have been transferred between the parent and subsidiary companies.
c) The assets have been solid to third parties.
d) The intercompany sale is eliminated in the consolidation process.

problem 3
: A private enterprise has a dozen subsidiaries. Under GAAP for private enterprises, the enterprise must:

a) Consolidate all the subsidiaries.
b) Report its subsidiaries using either the cost or equity method.
c) Report its subsidiaries at fair value.
d) Either consolidate or report its subsidiaries using the cost or equity method or at fair value.

problem 4: Well Co. incorporated a new company, Swell Ltd., and immediately purchased all of its shares. In the preparation of the consolidated financial statements at the acquisition date, there should be

a) Acquisition differentials and goodwill.
b) Acquisition differentials, but no goodwill.
c) No acquisition differentials, but there should be goodwill.
d) No acquisition differentials or goodwill.

problem 5: At the date of acquisition, Eliott Ltd. expected that, based on share prices, it would have to provide contingent consideration within the next two years. At the time of acquisition, Eliott classified the contingent consideration as a liability. The share prices did not perform as expected and the contingent consideration did not have to be paid. At the end of the second year, Eliott should debit the liability for the contingent consideration and debit the

a) Investment in subsidiary account.
b) Gain from contingent consideration account.
c) Loss from contingent consideration account.
d) Retained earnings.

problem 6: In accounting for property, plant, and equipment, consolidation adjustments to eliminate intercompany transactions and unrealized profits will differ depending on whether the reporting entity:

a) Uses IFRS or GAAP in 2011.
b) Uses the cost model or the revaluation model.
c) Uses a manual system or computer software for consolidation.
d) Has significant influence or control.

problem 7: When a loss is recognized on intercompany transactions, what must be done for consolidation?

a) The loss should be eliminated.
b) The intercompany transaction should be eliminated.
c) The loss and its tax effect should be eliminated.
d) The intercompany transaction should be eliminated, and the assets transaction should be assessed for impairment.

problem 8: Under IFRS, when an impairment loss occurs, the asset should be written at:

a) The higher of the fair value less disposal costs and value in use.
b) The lower of the fair value less disposal costs and value in use.
c) The fair value less disposal costs.
d) The value in use.

problem 9: Which of the given is true under IFRS?

a) Push-down accounting is allowed for all publicly accountable companies.
b) Push-down accounting is allowed for publicly accountable companies wholly owned subsidiaries.
c) Push-down accounting is allowed for publicly accountable companies with at least a 90% ownership in their subsidiaries.
d) Push-down accounting is not allowed for publicly accountable companies.

problem 20: Which of the given statements about control is true?

a) Company A can control Company B only if it acquires all.
b) Company A must acquire at least 50% of Company B’s to have control.
c) Company A must acquire at least 50% of Company B’s shares for it to have control.
d) Company A can have control of Company B, even if its own shares, as long as it has the power to determine B’s strategy financing policies.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M92828

Have any Question? 


Related Questions in Financial Accounting

Complete problem 14-10 prepare a statement of cash flows

Complete "Problem 14-10 Prepare a Statement of Cash Flows; Free Cash Flow" in chapter 14 of Managerial Accounting. Present your responses in an Excel spreadsheet. Joyner Company's income statement for Year 2 follows: Sal ...

Assignmentsqueezed by rising costs a confectioner struggles

Assignment Squeezed by Rising Costs, a Confectioner Struggles to Cope Telford James and his wife Ivey are the second-generation owners of James Confectioners, a family-owned manufacturer of premium chocolates that was st ...

Using the data that follows and assuming cost of goods sold

Using the data that follows and assuming cost of goods sold is $273,700, prepare the cost of goods sold section of a merchandising income statement (periodic inventory system). Include the amount of purchases for the mon ...

Assignment non-for-profit financial reporting reviewselect

Assignment: Non-for-Profit Financial Reporting Review Select one not-for-profit organization in an area of interest to you and review the financial statements and audit report for the organization. The financial statemen ...

Assume that you make and sell 7800 t shirts in the first

Assume that you make and sell 7800 t shirts in the first year. Use your cost formula to calculate your first years total cost. If you sell these shirrs at $15 each how much will the net profit be.

Outdoor furniture company has inventory balances at the end

Outdoor Furniture Company has inventory balances at the end of August as follows: Materials inventory $21,360 Work-in-Process inventory 15,112 Finished goods inventory 17,120 Job order cost cards for jobs in process at t ...

Accounting discussion questionsdq1review the provisions of

ACCOUNTING DISCUSSION QUESTIONS DQ1 Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.). Identify the provisions that you b ...

1 describe the formal procedures associated with issuing

1. Describe the formal procedures associated with issuing long-term debt. 2. Describe the nature, type, and valuation of current liabilities. 3. Explain the accounting for different types of loss contingencies. 4. Explai ...

1-describe in detail the guidelines used for leading

1-Describe in detail the guidelines used for leading decision group meetings. 2-Explain leadership in? self-managed teams and the differences between internal and external leadership roles.

Assignmentauerbach enterprises manufactures air

Assignment Auerbach Enterprises manufactures air conditioners for automobiles and trucks manufactured throughout North America. The company designs its products with flexibility to accommodate many makes and models of au ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro