Ch5

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ch5
Student: ___________________________________________________________________________

Bristle Corporation acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000. The fair value of the noncontrolling interest at that date was determined to be $100,000. Silver's balance sheet immediately before the combination reflected the following balances:

  

A careful review of the fair value of Silver's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. Goodwill is assigned proportionately to Bristle and the noncontrolling shareholders.  

1.
Based on the preceding information, what amount of inventory will be included in the consolidated balance sheet immediately following the acquisition?   

A. 
$0

B. 
$65,000

C. 
$70,000

D. 
$60,000

 
2.
Based on the preceding information, what amount of land will be included in the consolidated balance sheet immediately following the acquisition?   

A. 
$0

B. 
$10,000

C. 
$90,000

D. 
$100,000

 
3.
Based on the preceding information, what amount of buildings and equipment (net) will be included in the consolidated balance sheet immediately following the acquisition?   

A. 
$0

B. 
$50,000

C. 
$250,000

D. 
$300,000

 
4.
Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet immediately following the acquisition?   

A. 
$0

B. 
$120,000

C. 
$65,000

D. 
$20,000

 
5.
Based on the preceding information, what amount will be reported as investment in Silver Corporation stock in the consolidated balance sheet immediately following the acquisition?   

A. 
$0

B. 
$210,000

C. 
$300,000

D. 
$400,000

 
6.
Based on the preceding information, what amount will be reported as noncontrolling interest in the consolidated balance sheet immediately following the acquisition?   

A. 
$0

B. 
$70,000

C. 
$83,750

D. 
$100,000

 

On January 1, 20X9, Gulliver Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

  

At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000.  

7.
Based on the preceding information, what amount of total inventory will be reported in the consolidated balance sheet prepared immediately after the business combination?   

A. 
$130,000

B. 
$135,000

C. 
$90,000

D. 
$45,000

 
8.
Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?   

A. 
$0

B. 
$40,000

C. 
$20,000

D. 
$15,000

 
9.
Based on the preceding information, what amount of total assets will be reported in the consolidated balance sheet prepared immediately after the business combination?   

A. 
$720,000

B. 
$840,000

C. 
$825,000

D. 
$865,000

 
10.
Based on the preceding information, what amount of total liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?   

A. 
$395,000

B. 
$280,000

C. 
$275,000

D. 
$195,000

 
11.
Based on the preceding information, what amount will be reported as noncontrolling interest in the consolidated balance sheet prepared immediately after the business combination?   

A. 
$0

B. 
$15,000

C. 
$40,000

D. 
$46,000

 
12.
Based on the preceding information, what amount of consolidated retained earnings will be reported?   ...
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