Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Tall Company buys all of the outstanding stock of Small Company on November 1, Year One for $500,000 and is now preparing consolidated financial statements at the end of Year One. Small earned revenues of $10,000 per month during Year One along with expenses of $8,000 per month. On November 1, Year One, Small had only one asset-a piece of land with a cost of $300,000 and a fair value of $450,000-and no liabilities. The land continues to appreciate in value and is worth $470,000 at the end of Year One. Which of the following statements is true about the consolidated financial statements at the end of Year One?

a) Consolidated net income will include $4,000 earned by Small.

b) Goodwill at the end of Year One is reported as $30,000.

c) The land owned by Small is reported at the end of Year One at $470,000.

d) On consolidated financial statements, a $150,000 gain is reported on the land that was owned by Small.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M947739

Have any Question? 


Related Questions in Accounting Basics

Practice questionscompare and contrast marginal costing and

Practice questions: Compare and contrast marginal costing and throughput accounting.

Fraud triangle and red flagsread the following case study

Fraud Triangle and Red Flags Read the following case study and respond according to the instructions at the end: Plutonium was an Internet start-up company founded in 1988 at the beginning of the technology boom. One of ...

Following is the current balance sheet for a local

Following is the current balance sheet for a local partnership of doctors: Cash and current assets $ 50,000Liabilities $ 90,000 Land 290,000 A, capital 70,000 Building and equipment (net) 220,000 B, capital 90,000 C, cap ...

You are an accountant at wcp accountants and investment

You are an accountant at WCP Accountants and Investment Advisers. You have been approached by a client for your professional advice on investing in Woolworths Ltd. Your client supports Australian made products. Your clie ...

Discuss the extent to which cost data is useful in the

Discuss the extent to which cost data is useful in the determination of pricing policy. Explain the advantages and disadvantages of presenting cost data for possible utilization in pricing policy determination using an a ...

What characteristics must the convertible bonds display in

What characteristics must the convertible bonds display in order to justify the accounting treatment followed on initial recognition?

The rules and requirements for reporting and disclosing

The rules and requirements for reporting and disclosing segments and non-controlling interests within a 10-K report. Executive Summary Projects Advanced Accounting Project 1: Analysis of a 10-K 1. Explore the concepts of ...

What is a provision for doubtful debts and how is it

What is a provision for doubtful debts and how is it accounted for in the profit and loss and balance sheet?

During the year mr ashok sold his private car for 50000 and

During the year mr. ashok sold his private car for 50000 and this amount invested in business he withdraw from business 1500 per month up to july 31st 2011 and thereafter 4500 per month as Drawing you are required to pre ...

Accountingratios1 pick a ratio and describe how it is

Accounting Ratios 1. Pick a ratio and describe how it is figured. Then discuss what this ratio tells us about an organization. Financial Statement Analysis author's Corners Video 2. What are the main objectives of ratio ...

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate