Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

1. Water Company owns 80 percent of Fire Company's outstanding common stock. On December 31, 20x9, Fire sold equipment to Water at price in excess of Fire's carrying amount, but less than its original cost. On consolidated balance sheet at December 31, 20x9, carrying amount of the equipment must be reported at:

a. Water's original cost
b. Fire's original cost
c. Water's original cost less Fire's recorded gain
d. Water's original cost less 80 percent of Fire's recorded gain

2. Port Inc. owns 100 percent of Salem Inc. On January 1, 20x2, Port sold delivery equipment to Salem at gain. Port had owned equipment for two years and used five-year straight-line depreciation rate with no residual value. Salem is using three-year straight-line depreciation rate with no residual value for equipment. In consolidated income statement, Salem's recorded depreciation expense on equipment for 20x2 will be decreased by:

a. 20 percent of the gain on the sale
b. 33 1/3 percent of the gain on the sale
c. 50 percent of the gain on the sale
d. 100 percent of the gain on the sale

3. Middle Company holds 60 percent of Bottom Corporation's voting shares. Bottom has developed new type of production equipment that seems to be quite marketable. It spent $40,000 in developing equipment; though, Middle agreed to buy production rights for machine for $100,000. If intercompany sale occurred on January 1, 20x2, and production rights are expected to have value for five years, at what amount must rights be reported in consolidated balance sheet for December 31, 20x2?

a. $0
b. $32,000
c. $80,000
d. $100,000

4. A 70 percent owned subsidiary company declares and pays cash dividend. What effect does dividend have on retained earnings and minority interest balances in parent company's consolidated balance sheet?

a. No effect on either retained earnings or minority interest
b. No effect on retained earnings and decrease in minority interest
c. Decreases in both retained earnings and minority interest
d. A decrease in retained earnings and no effect on minority interest

5. On January 1, 20x1, Prim Inc. acquired all of Scrap Inc.'s outstanding common shares for cash equal to stock's book value. Carrying amount of Scrap's assets and liabilities approximated their fair values, except that carrying amount of its building was more than fair value. In creating Prim's 20x2 consolidated income statement, which of the given adjustments would be made?

a. Decrease depreciation expense and recognize goodwill amortization
b. Increase depreciation expense and recognize goodwill amortization
c. Decrease depreciation expense and recognize no goodwill amortization
d. Increase depreciation expense and recognize no goodwill amortization

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M920698

Have any Question? 


Related Questions in Accounting Basics

Imagine you are the responsible accountant for one of our

Imagine you are the responsible accountant for one of our companies. Apart from local gaap or local accounting rules but with regard to HB II (Group financial statement) and with the help of the HB II accounting manual o ...

Business assignmentthe comany i have choosen is upsresearch

Business Assignment The comany i have choosen is UPS. Research a company that interests you from the Fortune 500. (A list will be provided). Analyze what they do. What business are they in? What industry? How have they b ...

Accounting theory and contemporary issues individual case

Accounting Theory and Contemporary Issues Individual case study Assignment- Assessment Description - Learning Outcome:  Research and argue a position in regard to a contemporary issue in the accounting profession. Evalua ...

Questiona not-for-profit organization receives a restricted

Question: A not-for-profit organization receives a restricted gift. When, and in which type of fund, should it recognize the revenue? When, and in which type of fund, should it recognize the related expense? What is the ...

Question 1the financial statement that shows revenue and

Question 1 The financial statement that shows revenue and expenses for a period of time is the A. balance sheet. B. income statement. C. statement of owner's equity. D. statement of cash flows. Question 2 If a company's ...

Question 1under the allowance method bad debt expense is

Question 1 Under the allowance method, Bad Debt Expense is recorded A. as an estimate. B. when an individual account is written off. C. several times during the year as needed. D. None of the above Question 2 Which amoun ...

Accounting discussion questionbulluse the internet to

Accounting Discussion Question • Use the Internet to research an annual report of a retail company. • Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or credit ...

Kent cpa is a staff auditor participating in the audit

Kent, CPA is a staff auditor participating in the audit engagement of Fort, Inc. Based upon each of the circumstances below, indicate whether or not Kent's actions impair his independence. Explain your response for each ...

Why does it matter whether social security is considered a

Why does it matter whether Social Security is considered a pension plan or an entitlement program? How does the FASAB direct that Social Security be reported? What unique issues does the federal government face in calcul ...

Accounting practice set -this case is designed to reinforce

Accounting Practice Set - This case is designed to reinforce certain technical accounting skills that are a prerequisite to a solid understanding of the generally accepted accounting principles that underlie preparation ...

  • 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