,Advanced
Accounting
Tenth Edition
Joe B. Hoyle
Associate Professor of Accounting
Robins School of Business
University of Richmond
Thomas F. Schaefer
KPMG Professor of Accountancy
Mendoza College of Business
University of Notre Dame
Timothy S. Doupnik
Professor of Accounting
Moore School of Business
University of South Carolina
,ADVANCED ACCOUNTING
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the
Americas, New York, NY, 10020. Copyright © 2011, 2009, 2007, 2004, 2001, 1998, 1994, 1991, 1987, 1984
by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without the prior written
consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic
storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 WDQ/WDQ 1 0 9 8 7 6 5 4 3 2 1 0
ISBN 978-0-07-813662-7
MHID 0-07-813662-8
Vice president and editor-in-chief: Brent Gordon
Editorial director: Stewart Mattson
Publisher: Tim Vertovec
Senior sponsoring editor: Dana L. Woo
Director of development: Ann Torbert
Development editor: Katie Jones
Vice president and director of marketing: Robin J. Zwettler
Marketing director: Sankha Basu
Associate marketing manager: Dean Karampelas
Vice president of editing, design and production: Sesha Bolisetty
Managing editor: Lori Koetters
Lead production supervisor: Carol A. Bielski
Interior and cover designer: Pam Verros
Media project manager: Joyce J. Chappetto
Cover credit: © Adam Gault/Digital Vision/Getty Images
Typeface: 10/12 Times New Roman
Compositor: Aptara®, Inc.
Printer: Worldcolor
Library of Congress Cataloging-in-Publication Data
Hoyle, Joe Ben.
Advanced accounting / Joe B. Hoyle, Thomas F. Schaefer, Timothy S. Doupnik.—10th ed.
p. cm.
Includes index.
ISBN-13: 978-0-07-813662-7 (alk. paper)
ISBN-10: 0-07-813662-8 (alk. paper)
1. Accounting. I. Schaefer, Thomas F. II. Doupnik, Timothy S. III. Title.
HF5636.H69 2011
657'.046—dc22 2009054189
www.mhhe.com
,To our families
,The real purpose of books is to trap the
mind into doing its own thinking.
Christopher Morley
,About the Authors
Joe B. Hoyle, University of Richmond
Joe B. Hoyle is Associate Professor of Accounting at the Robins School of Business at the
University of Richmond, where he teaches Intermediate Accounting and Advanced Account-
ing. In 2009, he was named one of the 100 most influential people in the accounting profes-
sion by Accounting Today. He was named the 2007 Virginia Professor of the Year by the
Carnegie Foundation for the Advancement of Teaching and the Center for Advancement and
Support of Education. He has been named a Distinguished Educator five times at the Univer-
sity of Richmond and Professor of the Year on two occasions. Joe recently authored a book of
essays titled Tips and Thoughts on Improving the Teaching Process in College, which is avail-
able without charge at http://oncampus.richmond.edu/~jhoyle/.
Thomas F. Schaefer, University of Notre Dame
Thomas F. Schaefer is the KPMG Professor of Accounting at the University of Notre Dame.
He has written a number of articles in scholarly journals such as The Accounting Review, Jour-
nal of Accounting Research, Journal of Accounting & Economics, Accounting Horizons, and
others. His primary teaching and research interests are in financial accounting and reporting.
Tom is active with the Association for the Advancement of Collegiate Schools of Business
International and is a past president of the American Accounting Association’s Accounting
Program Leadership Group. Tom received the 2007 Joseph A. Silvoso Faculty Merit Award
from the Federation of Schools of Accountancy.
Timothy S. Doupnik, University of South Carolina
Timothy S. Doupnik is Professor of Accounting at the University of South Carolina, where he
teaches Financial and International Accounting. Tim has published extensively in the area of
international accounting in journals such as Accounting, Organizations, and Society; Abacus;
International Journal of Accounting; and Journal of International Business Studies. Tim is a
past president of the American Accounting Association’s International Accounting Section,
and he received the section’s Outstanding International Accounting Educator Award in 2008.
v
,Students Solve the Accounting Puzzle
The approach used by Thinking Critically
Hoyle, Schaefer, and With this text, students gain a well-balanced appreciation
Doupnik allows students of the accounting profession. As Hoyle 10e introduces
them to the field’s many aspects, it often focuses on past
to think critically about controversies and present resolutions. The text shows the
accounting, just as they development of financial reporting as a product of intense
will in their careers and and considered debate that continues today and will in the
future.
as they prepare for the
CPA exam. Read on to
Readability
understand how students
The writing style of the nine previous editions has been
will succeed as accounting highly praised. Students easily comprehend chapter con-
majors and as future CPAs cepts because of the conversational tone used throughout
by using Advanced the book. The authors have made every effort to ensure that
the writing style remains engaging, lively, and consistent.
Accounting, 10e.
EXHIBIT 2.1
Recent Notable Business
Acquirer Target
Real-World Examples
Combinations Pfizer
InBev
Wyeth
Anheuser-Busch Students are better able to relate what they
Merck
Bank of America
Schering-Plough
Merrill Lynch
learn to what they will encounter in the busi-
Verizon Wireless
Mars
Alltel
Wm. Wrigley, Jr.
ness world after reading these frequent exam-
Oracle Sun Microsystems ples. Quotations, articles, and illustrations
Delta Airlines Northwest Airlines
EMC Data Domain from Forbes, The Wall Street Journal, Time,
Abbott Laboratories Advanced Medical Optics
and BusinessWeek are incorporated through-
out the text. Data have been pulled from busi-
If the goal of business activity is to maximize the firm
combinations help achieve that goal? Clearly, the busine ness, not-for-profit, and government financial
toward business combinations as a strategy for growth and statements as well as official pronouncements.
obviously becoming critical as firms compete in today’s ma
ficient in delivering goods and services, they gain a compe
fi bl f h i l d
Discussion Questions
Discussion Question This feature facilitates student understanding
of the underlying accounting principles at
HOW DOES A COMPANY REALLY DECIDE W work in particular reporting situations. Simi-
Pilgrim Products, Inc., buys a controlling inte
poration. Shortly after the acquisition, a m
lar to minicases, these questions help explain
convened to discuss the internal reporting p the issues at hand in practical terms. Many
subsidiary. Each member of the staff has a
method, initial value method, or partial equ
times, these cases are designed to demon-
issue, Pilgrim’s chief financial officer outline strate to students why a topic is problematic
I already understand how each method w and worth considering.
disadvantages of all three. I realize, for e
more detailed information whereas the in
vi
,with 10th Edition Features
CPA Simulations Please visit the text Web site for the o
Situation: On January 1, Year 1, Big Corporation acqu
Hoyle et al.’s CPA Simulations, powered by outstanding voting stock. It was the first such acquis
transaction, Big and Little reported, respectively, a
Kaplan, are found in Chapters 3, 5, 10, 17, and $900,000 and $330,000, contributed capital of $30
18 of the 10th edition. Simulations are set up in $800,000 and $370,000. Unless otherwise stated, assu
book value of $200,000 but a fair value of $300,000.
the text and completed online at the 10th edi- Little’s other assets and liabilities are fairly valued in
Topics to be covered in simulation:
tion Web site (mhhe.com/hoyle10e). This al- • Goodwill to be reported.
lows students to practice advanced accounting • Consolidated assets and equities.
• Consolidated expenses.
concepts in a Web-based interface identical to • Unrecorded intangible assets.
• Goodwill impairment.
that used in the actual CPA exam. There will be • Determination of control.
no hesitation or confusion when students sit for
the real exam; they will know exactly how to
maneuver through the computerized test.
End-of-Chapter Materials
As in previous editions, the end-of-chapter material remains a strength of the text. The sheer
number of questions, problems, and Internet assignments tests, and therefore expands, the
students’ knowledge of chapter concepts.
Excel Spreadsheet Assignments extend specific problems and are located on the 10th edi-
tion Web site at mhhe.com/hoyle10e. An Excel icon appears next to those problems that have
corresponding spreadsheet assignments.
“Develop Your Skills” asks questions that address the four skills students need to master to
pass the CPA exam: Research, Analysis, Spreadsheet, and Communication. An icon indicates
when these skills are tested.
Comprehensive (Estimated Time: 40 to 65 Minutes) On
pany’s outstanding common stock for $84
Illustration a 12-year remaining life was undervalued Develop Your
life was undervalued, but only by $10,000 Skills
PROBLEM were equal to their fair values at that time
value of $40,000 and a 20-year remainin
$720,000. ACCOUNTING THEORY RESEARCH CASE
During 2011, Bottom reported net inco
$120,000 in 2012 with $20,000 in divide
the companies reported the following se
CPA
skills
The FASB ASC paragraph 810-10-45-16 states
consolidated statement of financial position w
the year: amount shall be clearly identified and labeled, fo
However, prior to issuing this current reportin
D
Questions 1. What is a business combination?
Problems Note: Problems 1–25 relate to the acquisition met
2. Describe the different types of legal arrangements t 26 through 30 relate to the purchase method. Pro
3. What does the term consolidated financial statem
The Acquisition Method
4. Within the consolidation process, what is the purp
5. Jones Company obtains all of the common stock o LO1 1. Which of the following does not represent a
stock. Under these circumstances, why might the a. Combinations as a vehicle for achieving
6. What is the accounting basis for consolidating b. Cost savings through elimination of dupl
recorded using the acquisition method? c. Quick entry for new and existing product
d. Larger firms being less likely to fail.
vii
,Supplements
Instructor’s Resource CD • Self-Grading Multiple-Choice Quizzes (mhhe.com/
hoyle10e) for each chapter are available on the Student
ISBN 9780077268022 Center of the text’s Online Learning Center.
MHID 0077268024 • Excel Template Problems (mhhe.com/hoyle10e) are
available on the Student Center of the text’s Online
includes electronic files for all Learning Center. The software includes innovatively
designed Excel templates that may be used to solve
of the Instructor Supplements many complicated problems found in the book. These
problems are identified by a logo in the margin.
• PowerPoint Presentations (mhhe.com/hoyle10e) are
For the Instructor
• Instructor’s Resource and Solutions Manual, revised
available on the Student Center of the text’s Online
Learning Center. These presentations accompany each
chapter of the text and contain the same slides that are
by the text authors, includes the solutions to all discus- available to the instructor.
sion questions, end-of-chapter questions, and problems.
It provides chapter outlines to assist instructors in
preparing for class. Assurance of Learning Ready
• Test Bank, revised by Ilene Persoff, CW Post Campus/ Assurance of learning is an important element of many
Long Island University, has been significantly updated. accreditation standards. Hoyle 10e is designed specifi-
cally to support your assurance of learning initiatives.
• EZ Test Computerized Test Bank can be used to make
Each chapter in the book begins with a list of numbered
different versions of the same test, change the answer
learning objectives that appear throughout the chapter,
order, edit and add questions, and conduct online test-
as well as in the end-of-chapter problems and exercises.
ing. Technical support for this software is available at
Every test bank question is also linked to one of these
(800) 331-5094 or visit www.mhhe.com/eztest.
objectives, in addition to level of difficulty, topic area,
• PowerPoint® Presentations, revised by Marilynn Bloom’s Taxonomy level, AACSB, and AICPA skill area.
Leathart, Concordia University of Texas, deliver a com- EZ Test, McGraw-Hill’s easy-to-use test bank software,
plete set of slides covering many of the key concepts can search the test bank by these and other categories,
presented in each chapter. providing an engine for targeted Assurance of Learning
• Excel Template Problems and Solutions, revised analysis and assessment.
by Jack Terry of ComSource Associates, Inc., allow
students to develop important spreadsheet skills by
using Excel templates to solve selected assignments. AACSB Statement
The McGraw-Hill Companies is a proud corporate
• Connect Accounting
accounting member of AACSB International. Understanding the im-
ISBN 9780077417307; MHID 0077417305. portance and value of AACSB accreditation, Hoyle 10e
• Connect Plus Accounting accounting has sought to recognize the curricula guidelines detailed
ISBN 9780077417321; MHID 0077417321. in the AACSB standards for business accreditation by
connecting selected questions in the test bank to the gen-
eral knowledge and skill guidelines found in the AACSB
For the Student
• Study Guide/Working Papers ISBN 9780077268046;
standards.
The statements contained in Hoyle 10e are provided
only as a guide for the users of this text. The AACSB
MHID 0077268040. Revised by Sharon O’Reilly, leaves content coverage and assessment within the
St. Mary’s University of Minnesota, this combination of purview of individual schools, the mission of the school,
study guide and working papers reinforces the book’s and the faculty. While Hoyle 10e and the teaching pack-
key concepts by providing students with chapter out- age make no claim of any specific AACSB qualification
lines, multiple-choice questions, and problems for each or evaluation, we have, within the test bank, labeled
chapter in the text. In addition, this paperback contains selected questions according to the six general knowledge
all forms necessary for completing the end-of-chapter and skills areas.
material.
viii
, Technology
CPA Simulations
McGraw-Hill Connect Accounting accounting
Less Managing. More Teaching. Greater Learning.
McGraw-Hill Connect Accounting is an online assignment and assessment solution that connects students with the tools and resources
they’ll need to achieve success. McGraw-Hill Connect Accounting helps prepare students for their future by enabling faster learning,
more efficient studying, and higher retention of knowledge. Connect Accounting offers a number of powerful tools and features to make
managing assignments easier, so faculty can spend more time teaching. Connect Accounting offers you the features described below.
Simple assignment management
With Connect Accounting, creating assignments is easier than ever. The assignment management function enables you to:
• Create and deliver assignments easily with selectable end-of-chapter questions and test bank items.
• Streamline lesson planning, student progress reporting, and assignment grading to make classroom management more efficient than ever.
• Go paperless with the eBook and online submission and grading of student assignments.
Smart grading
When it comes to studying, time is precious. Connect Accounting helps students learn more efficiently by providing feedback and practice
material when they need it, where they need it. The grading function enables you to:
• Have assignments scored automatically, giving students immediate feedback on their work and side-by-side comparisons with correct answers.
• Access and review each response; manually change grades or leave comments for students to review.
• Reinforce classroom concepts with practice tests and instant quizzes.
Student progress tracking
Connect Accounting keeps instructors informed about how each student, section, and class is performing, allowing for more productive
use of lecture and office hours. The progress-tracking function enables you to:
• View scored work immediately and track individual or group performance with assignment and grade reports.
• Access an instant view of student or class performance relative to learning objectives.
• Collect data and generate reports required by many accreditation organizations, such as AACSB and AICPA.
McGraw-Hill Connect Plus Accounting
McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Accounting. A seamless integration of an
eBook and Connect Accounting, Connect Plus Accounting provides all of the Connect Accounting features plus an integrated eBook, allowing
for anytime, anywhere access to the textbook; dynamic links between the problems or questions you assign to your students and the location
in the eBook where that problem or question is covered; and a powerful search function to pinpoint and connect key concepts in a snap.
For more information about Connect, go to www.mcgrawhillconnect.com, or contact your local McGraw-Hill sales representative.
CPA Simulations
The McGraw-Hill Companies and Kaplan have teamed up to bring students CPA simulations to test their knowledge of
the concepts discussed in various chapters, practice critical professional skills necessary for career success, and prepare for the computer-
based CPA exam. Kaplan CPA Review provides a broad selection of Web-based simulations that were modeled after the AICPA format.
Exam candidates become familiar with the item format, the research database, and the spreadsheet and word processing software used
exclusively on the CPA exam (not Excel or Word), as well as the functionality of the simulations, including the tabs, icons, screens, and
tools used on the exam. CPA simulations are found in the end-of-chapter material after the very last cases in Chapters 3, 5, 10, 17, and 18.
Online Learning Center
www.mhhe.com/hoyle10e For instructors, the book’s Web site contains the Instructor’s Resource
and Solutions Manual, PowerPoint slides, Excel templates and solutions, Interactive Activities,
Text and Supplement Updates, and links to professional resources. The student section of the site
features online multiple-choice quizzes, a sample Study Guide chapter, PowerPoint presentations,
Check Figures, and Excel template exercises.
ALEKS® for Financial Accounting
ALEKS (Assessment and Learning in Knowledge Spaces) delivers precise, qualitative diagnostic assessments of students’ knowledge,
guides them in selecting appropriate new study material, and records their progress toward mastery of curricular goals in a robust class-
room management system. ALEKS interacts with the student much as a skilled human tutor would, moving between explanation and
practice as needed, correcting and analyzing errors, defining terms, and changing topics on request.
CourseSmart
CourseSmart is a new way to find and buy eTextbooks. At CourseSmart you can save up to 40% off the cost of a print textbook, reduce
your impact on the environment, and gain access to powerful Web tools for learning. Go to www.coursesmart.com to learn more.
ix
Accounting
Tenth Edition
Joe B. Hoyle
Associate Professor of Accounting
Robins School of Business
University of Richmond
Thomas F. Schaefer
KPMG Professor of Accountancy
Mendoza College of Business
University of Notre Dame
Timothy S. Doupnik
Professor of Accounting
Moore School of Business
University of South Carolina
,ADVANCED ACCOUNTING
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the
Americas, New York, NY, 10020. Copyright © 2011, 2009, 2007, 2004, 2001, 1998, 1994, 1991, 1987, 1984
by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without the prior written
consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic
storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 WDQ/WDQ 1 0 9 8 7 6 5 4 3 2 1 0
ISBN 978-0-07-813662-7
MHID 0-07-813662-8
Vice president and editor-in-chief: Brent Gordon
Editorial director: Stewart Mattson
Publisher: Tim Vertovec
Senior sponsoring editor: Dana L. Woo
Director of development: Ann Torbert
Development editor: Katie Jones
Vice president and director of marketing: Robin J. Zwettler
Marketing director: Sankha Basu
Associate marketing manager: Dean Karampelas
Vice president of editing, design and production: Sesha Bolisetty
Managing editor: Lori Koetters
Lead production supervisor: Carol A. Bielski
Interior and cover designer: Pam Verros
Media project manager: Joyce J. Chappetto
Cover credit: © Adam Gault/Digital Vision/Getty Images
Typeface: 10/12 Times New Roman
Compositor: Aptara®, Inc.
Printer: Worldcolor
Library of Congress Cataloging-in-Publication Data
Hoyle, Joe Ben.
Advanced accounting / Joe B. Hoyle, Thomas F. Schaefer, Timothy S. Doupnik.—10th ed.
p. cm.
Includes index.
ISBN-13: 978-0-07-813662-7 (alk. paper)
ISBN-10: 0-07-813662-8 (alk. paper)
1. Accounting. I. Schaefer, Thomas F. II. Doupnik, Timothy S. III. Title.
HF5636.H69 2011
657'.046—dc22 2009054189
www.mhhe.com
,To our families
,The real purpose of books is to trap the
mind into doing its own thinking.
Christopher Morley
,About the Authors
Joe B. Hoyle, University of Richmond
Joe B. Hoyle is Associate Professor of Accounting at the Robins School of Business at the
University of Richmond, where he teaches Intermediate Accounting and Advanced Account-
ing. In 2009, he was named one of the 100 most influential people in the accounting profes-
sion by Accounting Today. He was named the 2007 Virginia Professor of the Year by the
Carnegie Foundation for the Advancement of Teaching and the Center for Advancement and
Support of Education. He has been named a Distinguished Educator five times at the Univer-
sity of Richmond and Professor of the Year on two occasions. Joe recently authored a book of
essays titled Tips and Thoughts on Improving the Teaching Process in College, which is avail-
able without charge at http://oncampus.richmond.edu/~jhoyle/.
Thomas F. Schaefer, University of Notre Dame
Thomas F. Schaefer is the KPMG Professor of Accounting at the University of Notre Dame.
He has written a number of articles in scholarly journals such as The Accounting Review, Jour-
nal of Accounting Research, Journal of Accounting & Economics, Accounting Horizons, and
others. His primary teaching and research interests are in financial accounting and reporting.
Tom is active with the Association for the Advancement of Collegiate Schools of Business
International and is a past president of the American Accounting Association’s Accounting
Program Leadership Group. Tom received the 2007 Joseph A. Silvoso Faculty Merit Award
from the Federation of Schools of Accountancy.
Timothy S. Doupnik, University of South Carolina
Timothy S. Doupnik is Professor of Accounting at the University of South Carolina, where he
teaches Financial and International Accounting. Tim has published extensively in the area of
international accounting in journals such as Accounting, Organizations, and Society; Abacus;
International Journal of Accounting; and Journal of International Business Studies. Tim is a
past president of the American Accounting Association’s International Accounting Section,
and he received the section’s Outstanding International Accounting Educator Award in 2008.
v
,Students Solve the Accounting Puzzle
The approach used by Thinking Critically
Hoyle, Schaefer, and With this text, students gain a well-balanced appreciation
Doupnik allows students of the accounting profession. As Hoyle 10e introduces
them to the field’s many aspects, it often focuses on past
to think critically about controversies and present resolutions. The text shows the
accounting, just as they development of financial reporting as a product of intense
will in their careers and and considered debate that continues today and will in the
future.
as they prepare for the
CPA exam. Read on to
Readability
understand how students
The writing style of the nine previous editions has been
will succeed as accounting highly praised. Students easily comprehend chapter con-
majors and as future CPAs cepts because of the conversational tone used throughout
by using Advanced the book. The authors have made every effort to ensure that
the writing style remains engaging, lively, and consistent.
Accounting, 10e.
EXHIBIT 2.1
Recent Notable Business
Acquirer Target
Real-World Examples
Combinations Pfizer
InBev
Wyeth
Anheuser-Busch Students are better able to relate what they
Merck
Bank of America
Schering-Plough
Merrill Lynch
learn to what they will encounter in the busi-
Verizon Wireless
Mars
Alltel
Wm. Wrigley, Jr.
ness world after reading these frequent exam-
Oracle Sun Microsystems ples. Quotations, articles, and illustrations
Delta Airlines Northwest Airlines
EMC Data Domain from Forbes, The Wall Street Journal, Time,
Abbott Laboratories Advanced Medical Optics
and BusinessWeek are incorporated through-
out the text. Data have been pulled from busi-
If the goal of business activity is to maximize the firm
combinations help achieve that goal? Clearly, the busine ness, not-for-profit, and government financial
toward business combinations as a strategy for growth and statements as well as official pronouncements.
obviously becoming critical as firms compete in today’s ma
ficient in delivering goods and services, they gain a compe
fi bl f h i l d
Discussion Questions
Discussion Question This feature facilitates student understanding
of the underlying accounting principles at
HOW DOES A COMPANY REALLY DECIDE W work in particular reporting situations. Simi-
Pilgrim Products, Inc., buys a controlling inte
poration. Shortly after the acquisition, a m
lar to minicases, these questions help explain
convened to discuss the internal reporting p the issues at hand in practical terms. Many
subsidiary. Each member of the staff has a
method, initial value method, or partial equ
times, these cases are designed to demon-
issue, Pilgrim’s chief financial officer outline strate to students why a topic is problematic
I already understand how each method w and worth considering.
disadvantages of all three. I realize, for e
more detailed information whereas the in
vi
,with 10th Edition Features
CPA Simulations Please visit the text Web site for the o
Situation: On January 1, Year 1, Big Corporation acqu
Hoyle et al.’s CPA Simulations, powered by outstanding voting stock. It was the first such acquis
transaction, Big and Little reported, respectively, a
Kaplan, are found in Chapters 3, 5, 10, 17, and $900,000 and $330,000, contributed capital of $30
18 of the 10th edition. Simulations are set up in $800,000 and $370,000. Unless otherwise stated, assu
book value of $200,000 but a fair value of $300,000.
the text and completed online at the 10th edi- Little’s other assets and liabilities are fairly valued in
Topics to be covered in simulation:
tion Web site (mhhe.com/hoyle10e). This al- • Goodwill to be reported.
lows students to practice advanced accounting • Consolidated assets and equities.
• Consolidated expenses.
concepts in a Web-based interface identical to • Unrecorded intangible assets.
• Goodwill impairment.
that used in the actual CPA exam. There will be • Determination of control.
no hesitation or confusion when students sit for
the real exam; they will know exactly how to
maneuver through the computerized test.
End-of-Chapter Materials
As in previous editions, the end-of-chapter material remains a strength of the text. The sheer
number of questions, problems, and Internet assignments tests, and therefore expands, the
students’ knowledge of chapter concepts.
Excel Spreadsheet Assignments extend specific problems and are located on the 10th edi-
tion Web site at mhhe.com/hoyle10e. An Excel icon appears next to those problems that have
corresponding spreadsheet assignments.
“Develop Your Skills” asks questions that address the four skills students need to master to
pass the CPA exam: Research, Analysis, Spreadsheet, and Communication. An icon indicates
when these skills are tested.
Comprehensive (Estimated Time: 40 to 65 Minutes) On
pany’s outstanding common stock for $84
Illustration a 12-year remaining life was undervalued Develop Your
life was undervalued, but only by $10,000 Skills
PROBLEM were equal to their fair values at that time
value of $40,000 and a 20-year remainin
$720,000. ACCOUNTING THEORY RESEARCH CASE
During 2011, Bottom reported net inco
$120,000 in 2012 with $20,000 in divide
the companies reported the following se
CPA
skills
The FASB ASC paragraph 810-10-45-16 states
consolidated statement of financial position w
the year: amount shall be clearly identified and labeled, fo
However, prior to issuing this current reportin
D
Questions 1. What is a business combination?
Problems Note: Problems 1–25 relate to the acquisition met
2. Describe the different types of legal arrangements t 26 through 30 relate to the purchase method. Pro
3. What does the term consolidated financial statem
The Acquisition Method
4. Within the consolidation process, what is the purp
5. Jones Company obtains all of the common stock o LO1 1. Which of the following does not represent a
stock. Under these circumstances, why might the a. Combinations as a vehicle for achieving
6. What is the accounting basis for consolidating b. Cost savings through elimination of dupl
recorded using the acquisition method? c. Quick entry for new and existing product
d. Larger firms being less likely to fail.
vii
,Supplements
Instructor’s Resource CD • Self-Grading Multiple-Choice Quizzes (mhhe.com/
hoyle10e) for each chapter are available on the Student
ISBN 9780077268022 Center of the text’s Online Learning Center.
MHID 0077268024 • Excel Template Problems (mhhe.com/hoyle10e) are
available on the Student Center of the text’s Online
includes electronic files for all Learning Center. The software includes innovatively
designed Excel templates that may be used to solve
of the Instructor Supplements many complicated problems found in the book. These
problems are identified by a logo in the margin.
• PowerPoint Presentations (mhhe.com/hoyle10e) are
For the Instructor
• Instructor’s Resource and Solutions Manual, revised
available on the Student Center of the text’s Online
Learning Center. These presentations accompany each
chapter of the text and contain the same slides that are
by the text authors, includes the solutions to all discus- available to the instructor.
sion questions, end-of-chapter questions, and problems.
It provides chapter outlines to assist instructors in
preparing for class. Assurance of Learning Ready
• Test Bank, revised by Ilene Persoff, CW Post Campus/ Assurance of learning is an important element of many
Long Island University, has been significantly updated. accreditation standards. Hoyle 10e is designed specifi-
cally to support your assurance of learning initiatives.
• EZ Test Computerized Test Bank can be used to make
Each chapter in the book begins with a list of numbered
different versions of the same test, change the answer
learning objectives that appear throughout the chapter,
order, edit and add questions, and conduct online test-
as well as in the end-of-chapter problems and exercises.
ing. Technical support for this software is available at
Every test bank question is also linked to one of these
(800) 331-5094 or visit www.mhhe.com/eztest.
objectives, in addition to level of difficulty, topic area,
• PowerPoint® Presentations, revised by Marilynn Bloom’s Taxonomy level, AACSB, and AICPA skill area.
Leathart, Concordia University of Texas, deliver a com- EZ Test, McGraw-Hill’s easy-to-use test bank software,
plete set of slides covering many of the key concepts can search the test bank by these and other categories,
presented in each chapter. providing an engine for targeted Assurance of Learning
• Excel Template Problems and Solutions, revised analysis and assessment.
by Jack Terry of ComSource Associates, Inc., allow
students to develop important spreadsheet skills by
using Excel templates to solve selected assignments. AACSB Statement
The McGraw-Hill Companies is a proud corporate
• Connect Accounting
accounting member of AACSB International. Understanding the im-
ISBN 9780077417307; MHID 0077417305. portance and value of AACSB accreditation, Hoyle 10e
• Connect Plus Accounting accounting has sought to recognize the curricula guidelines detailed
ISBN 9780077417321; MHID 0077417321. in the AACSB standards for business accreditation by
connecting selected questions in the test bank to the gen-
eral knowledge and skill guidelines found in the AACSB
For the Student
• Study Guide/Working Papers ISBN 9780077268046;
standards.
The statements contained in Hoyle 10e are provided
only as a guide for the users of this text. The AACSB
MHID 0077268040. Revised by Sharon O’Reilly, leaves content coverage and assessment within the
St. Mary’s University of Minnesota, this combination of purview of individual schools, the mission of the school,
study guide and working papers reinforces the book’s and the faculty. While Hoyle 10e and the teaching pack-
key concepts by providing students with chapter out- age make no claim of any specific AACSB qualification
lines, multiple-choice questions, and problems for each or evaluation, we have, within the test bank, labeled
chapter in the text. In addition, this paperback contains selected questions according to the six general knowledge
all forms necessary for completing the end-of-chapter and skills areas.
material.
viii
, Technology
CPA Simulations
McGraw-Hill Connect Accounting accounting
Less Managing. More Teaching. Greater Learning.
McGraw-Hill Connect Accounting is an online assignment and assessment solution that connects students with the tools and resources
they’ll need to achieve success. McGraw-Hill Connect Accounting helps prepare students for their future by enabling faster learning,
more efficient studying, and higher retention of knowledge. Connect Accounting offers a number of powerful tools and features to make
managing assignments easier, so faculty can spend more time teaching. Connect Accounting offers you the features described below.
Simple assignment management
With Connect Accounting, creating assignments is easier than ever. The assignment management function enables you to:
• Create and deliver assignments easily with selectable end-of-chapter questions and test bank items.
• Streamline lesson planning, student progress reporting, and assignment grading to make classroom management more efficient than ever.
• Go paperless with the eBook and online submission and grading of student assignments.
Smart grading
When it comes to studying, time is precious. Connect Accounting helps students learn more efficiently by providing feedback and practice
material when they need it, where they need it. The grading function enables you to:
• Have assignments scored automatically, giving students immediate feedback on their work and side-by-side comparisons with correct answers.
• Access and review each response; manually change grades or leave comments for students to review.
• Reinforce classroom concepts with practice tests and instant quizzes.
Student progress tracking
Connect Accounting keeps instructors informed about how each student, section, and class is performing, allowing for more productive
use of lecture and office hours. The progress-tracking function enables you to:
• View scored work immediately and track individual or group performance with assignment and grade reports.
• Access an instant view of student or class performance relative to learning objectives.
• Collect data and generate reports required by many accreditation organizations, such as AACSB and AICPA.
McGraw-Hill Connect Plus Accounting
McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Accounting. A seamless integration of an
eBook and Connect Accounting, Connect Plus Accounting provides all of the Connect Accounting features plus an integrated eBook, allowing
for anytime, anywhere access to the textbook; dynamic links between the problems or questions you assign to your students and the location
in the eBook where that problem or question is covered; and a powerful search function to pinpoint and connect key concepts in a snap.
For more information about Connect, go to www.mcgrawhillconnect.com, or contact your local McGraw-Hill sales representative.
CPA Simulations
The McGraw-Hill Companies and Kaplan have teamed up to bring students CPA simulations to test their knowledge of
the concepts discussed in various chapters, practice critical professional skills necessary for career success, and prepare for the computer-
based CPA exam. Kaplan CPA Review provides a broad selection of Web-based simulations that were modeled after the AICPA format.
Exam candidates become familiar with the item format, the research database, and the spreadsheet and word processing software used
exclusively on the CPA exam (not Excel or Word), as well as the functionality of the simulations, including the tabs, icons, screens, and
tools used on the exam. CPA simulations are found in the end-of-chapter material after the very last cases in Chapters 3, 5, 10, 17, and 18.
Online Learning Center
www.mhhe.com/hoyle10e For instructors, the book’s Web site contains the Instructor’s Resource
and Solutions Manual, PowerPoint slides, Excel templates and solutions, Interactive Activities,
Text and Supplement Updates, and links to professional resources. The student section of the site
features online multiple-choice quizzes, a sample Study Guide chapter, PowerPoint presentations,
Check Figures, and Excel template exercises.
ALEKS® for Financial Accounting
ALEKS (Assessment and Learning in Knowledge Spaces) delivers precise, qualitative diagnostic assessments of students’ knowledge,
guides them in selecting appropriate new study material, and records their progress toward mastery of curricular goals in a robust class-
room management system. ALEKS interacts with the student much as a skilled human tutor would, moving between explanation and
practice as needed, correcting and analyzing errors, defining terms, and changing topics on request.
CourseSmart
CourseSmart is a new way to find and buy eTextbooks. At CourseSmart you can save up to 40% off the cost of a print textbook, reduce
your impact on the environment, and gain access to powerful Web tools for learning. Go to www.coursesmart.com to learn more.
ix
