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advanced accounting test 2 test bank exam 2024/2025 questions with completed & verified solution.
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advanced accounting test 2 test bank exam 2024/2025 questions with completed & verified solution.
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advanced accounting test 2If a parent uses the equity method in years subsequent to the acquisition year, the amount
debited to Retained Earnings in the consolidation entries is the subsidiary's Retained Earnings
balance: - ANS at beginning of the current year
If the accountant fails to record, on the consolidation worksheet, amortization related to an
undervalued truck: - ANS consolidated net income will be overstated
under the equity method, dividends declared by a subsidiary are accounted for by the parent as
- ANS decrease in equity investment
Goodwill is required to be tested for impairment: - ANS every year
jan 1st coldspring paid 770,000 using the equity method in 2019. they earned net income for
2020 of 125,000 and paid dividends of 18,000 - ANS jan 1st coldspring paid 770,000 using the
equity method in 2019. they earned net income for 2020 of 125,000 and paid dividends of
18,000
what is the AAP amortization expenses for 2020 - ANS take building of book value and fair
value and get the difference then divide by there life. take equipment of book value and fair
value and get the difference then divide by there life. add those up to get a debit
for 2020 what is the balance for equity income - ANS take net income minus depreciation you
calculated above
what is the balance in equity investment for 2020 - ANS take the purchase price minus
dividends plus equity income calculated above
the 2020 consolidation entry reverse coldspring recognition of whitt income and dividends in the
current year would include a net credit to equity investment for - ANS debit equity income from
above then credit dividends and take the difference to get the number
if coldspring had income from its own operations, excluding any investment income, of 425,500
in 2020 what would be consolidated net income - ANS take the 425,000 minus the equity
income you calculated above
what amount would appear as equity income on the consolidated income statement - ANS 0
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