Test Bank For Advanced Financial Accounting 13th Edition By Theodore Christensen, Complete Chapters 1 - 20, Verified Newest Version Test Bank For Advanced Financial Accounting 13th Edition By Theodore Christensen, Complete Chapters 1 - 20, Verified Newest Version Test Bank For Advanced Financial Ac...
Chapter 1 Intercorporate Acquisitions and Investments in Other Entities
AE A E A E A E A E A E A E
1) Assuming no impairment in value prior to transfer, assets transferred by a parent company
A E A E A E A E A E A E A E A E AE A E AE A E A E AE
toanother entity it has created should be recorded by the newly created entity at the assets':
E
A A E AE A E A E A E A E A E A E AE A E AE A E AE AE A E
A) cost to the parent company. AE A E A E A E
B) book value on the parent company's books at the date of transfer.
A E A E AE A E A E A E AE A E A E AE AE
C) fair value at the date of transfer.
A E AE A E A E AE AE
D) fair value of consideration exchanged by the newly created entity.
AE AE AE AE AE AE AE AE AE
Answer: B Diffic A E AE
ulty: 1 Easy AE AE
Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Learnin
AE AE AE AE AE AE AE AE AE AE AE
g Objective:
AE 01-
01 Understand and explain the reasons for and different methods of business expansion, the ty
AE AE AE AE AE AE AE AE AE AE AE A E A E A E
pes of organizational structures, and the types of acquisitions.; 01 -
A E A E A E A E A E A E A E A E A E AE
03 Make calculations and prepare journal entries for the creation of a business entity.
AE AE AE A E AE AE A E AE AE A E AE A E AE
Bloom's:
Remember AACSB: AE
A Reflective Thinking AICPA:
E AE E
A
FN Decision Making AE A E
2) Given the increased development of complex business structures, which of the followingreg
AE AE AE AE AE AE AE AE AE AE AE E
A
ulators is responsible for the continued usefulness of accounting reports?
AE AE AE AE AE AE AE AE AE
A) Securities and Exchange Commission (SEC) A E A E A E A E
B) Public Company Accounting Oversight Board (PCAOB) A E A E A E A E A E
C) Financial Accounting Standards Board (FASB) A E A E A E A E
D) All of the other answers are correct
A E AE A E A E A E A E
Answer: D Diffic A E AE
ulty: 1 Easy AE AE
Topic: An Introduction to Complex Business Structures A E A E A E A E A E
Learning Objective: 01- AE
01 Understand and explain the reasons for and different methods ofbusiness expansion, the ty
AE AE AE AE AE AE AE AE AE AE E
A A E A E AE
pes of organizational structures, and the types of acquisitions.
A E AE A E A E AE AE A E AE
Bloom's:
Remember AACSB AE
: Reflective Thinking AICPA:
A E AE E
A
FN Reporting AE
3) A business combination in which the acquired company's assets and liabilities are combinedwit
AE AE AE AE AE AE AE AE AE AE AE AE E
A
h those of the acquiring company into a single entity is defined as:
AE AE AE AE A E AE AE AE AE AE AE AE
A) Stock acquisition AE
B) Leveraged buyout AE
C) Statutory Merger AE
,D) Reverse statutory rollup
A E AE
, Answer: C Diffic A E AE
ulty: 1 Easy AE AE
Topic: Organizational Structure and Financial Reporting A E A E A E A E
Learning Objective: 01- AE
04 Understand and explain the differences between different forms ofbusiness combinations.
AE AE AE AE AE AE AE AE AE E
A AE
Bloom's:
Remember AACSB: AE
A Reflective Thinking AICPA:
E AE E
A
FN Decision Making AE A E
4) In which of the following situations do accounting standards not require that the financ
A E A E AE A E A E A E A E A E A E A E A E A E A E
ialstatements of the parent and subsidiary be consolidated?
E
A AE AE AE AE AE AE AE
A) A corporation creates a new 100 percent owned subsidiary
AE AE AE AE AE AE AE AE
B) A corporation purchases 90 percent of the voting stock of another company
AE A E A E A E A E AE A E A E A E AE A E
C) A corporation has both control and majority ownership of an unincorporated company
A E A E A E A E A E A E A E A E AE A E A E
D) A corporation owns less-than a controlling interest in an unincorporated company
A E A E A E AE A E A E A E AE AE A E
Answer: D Diffic A E AE
ulty: 1 Easy AE AE
Topic: Organizational Structure and Financial Reporting A E A E A E A E
Learning Objective: 01- AE
01 Understand and explain the reasons for and different methods ofbusiness expansion, the type
AE AE AE AE AE AE AE AE AE AE E
A A E A E AE
s of organizational structures, and the types of acquisitions.
A E AE A E A E AE AE A E AE
Bloom's:
Remember AACSB: AE
A Reflective Thinking AICPA:
E AE E
A
FN Decision Making AE A E
During its inception, Devon Company purchased land for $100,000 and a building for $180,000. A
AE AE AE AE AE AE AE AE AE AE AE AE AE AE
fter exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary,Reg
AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE E
A
an Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses straight-
AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE
line depreciation. Useful life for the building is 30 years, with zero residual value. An appraisal r
AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE
evealed that the building has a fair value of $200,000.
AE AE AE AE AE A E A E AE AE
5) Based on the information provided, at the time of the transfer, Regan Company should record:
A E AE A E A E A E A E A E A E AE A E A E A E A E A E
A) Building at $180,000 and no accumulated depreciation. A E A E A E A E A E A E
B) Building at $162,000 and no accumulated depreciation. A E A E A E A E A E A E
C) Building at $200,000 and accumulated depreciation of $24,000. A E A E A E A E A E A E A E
D) Building at $180,000 and accumulated depreciation of $18,000. A E A E A E A E A E A E A E
Answer: D Difficult A EA E AE
y: 2 Medium A E A E
Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Busine A E A E A E A E A E A E A E A E A E
ss Entities AE
Learning Objective: 01- AE
04 Understand and explain the differences between different forms of business combinations.; 0
AE AE AE AE AE AE AE AE AE AE A E A E
1-03 Make calculations and prepare journal entries for the creation of a business entity.
A E A E A E A E A E A E A E A E A E A E AE AE AE
Bloom's:
Understand AACSB AE
: Analytical Thinking AICPA:
A E AE E
A
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