Test Bank For Advanced Accounting 9thEdi
d d d d d d
tion, Fischer, Taylor & Cheng d d d d
YOU CAN FIND MORE QUESTIONS AND ANSWERS, just go HERE
d d d d d d d d d
MULTIPLE CHOICE d
1. Andeconomicdadvantagedofdadbusinessdcombinationdincludes
a. Utilizingdduplicativedassets.
b. Creatingdseparatedmanagementdteams.
c. Coordinateddmarketingdcampaigns.
d. Horizontallydcombiningdlevelsdwithindthedmarketingdchain.
2. Adtaxdadvantagedofdbusinessdcombinationdcandoccurdwhendthedexistingdownerdofd
a companysells out and receives:
d d d d d
a. cashdtoddeferdthedtaxabledgaindasdad"tax-freedreorganization."
b. stockdtoddeferdthedtaxabledgaindasdad"tax-freedreorganization."
c. cashdtodcreatedadtaxabledgain.
d. stockdtodcreatedadtaxabledgain.
3. Adcontrollingdinterestdindadcompanydimpliesdthatdthedparentdcompany
a. ownsdalldofdthedsubsidiary'sdstock.
b. hasdinfluencedoverdadmajoritydofdthedsubsidiary'sdassets.
c. hasdpaiddcashdfordadmajoritydofdthedsubsidiary'sdstock.
d. hasdtransferreddcommondstockdfordadmajoritydofdthedsubsidiary'sdoutstandingd
bonds anddebentures.
d d
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
,4. Whichdofdthedfollowingdisdadpotentialdabusedthatdmaydarisedwhendadbusinessdcom
bination isaccounted for as a pooling of interests?
d d d d d d d d
a. Assetsdofdthedbuyerdmaydbedovervalueddwhendthedpricedpaiddbydthedinvestordi
s allocatedamong specific assets.
d d d d
b. Earningsdofdthedpooleddentitydmaydbedincreaseddbecausedofdthedcombinationdo
nly and notas a result of efficient operations.
d d d d d d d d
c. Liabilitiesdmaydbedundervalueddwhendthedpricedpaiddbydthedinvestordisdal
located tospecific liabilities.
d d d
d. Andunduedamountdofdcostdmaydbedassigneddtodgoodwill,dthusdpotentiallydal
lowing anunderstatement of pooled earnings.
d d d d d
5. Company B acquired the assets (net of liabilities) of Company S in exchange fo
d d d d d d d d d d d d d
r cash. Theacquisition price exceeds the fair value of the net assets acquired. Ho
d d d d d d d d d d d d d d
w should Company Bdetermine the amounts to be reported for the plant and eq
d d d d d d d d d d d d d d
uipment, and for long-term debt of the acquired Company S?
d d d d d d d d d
d Plant and Equipment
d d Long-Term Debt d
a. Fair value d S's carrying amount
d d
b. Fair value d Fair value d
c. S's carrying amount
d d Fair value d
d. S's carrying amount
d d S's carrying amount
d d
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
,6. PublicsdCompanydacquireddthednetdassetsdofdCitizendCompanydduri
ng 20X5.The purchase price was $800,000. On the date of the tra
d d d d d d d d d d d d
nsaction,
Citizen had no long- d d d
term investments in marketable equity securitiesand $400,0
d d d d d d d
00 in liabilities. The fair value of Citizen assets on the acqui
d d d d d d d d d d d
sition date was as follows: d d d d
Current assets................................. $ 800,000
d d d
Noncurrent assets. .................. 600,000 d
$1,400,000
==========
How should Publics account for the $200,000 difference between the fair valu
d d d d d d d d d d d
e of the netassets acquired, $1,000,000, and the cost, $800,000?
d d d d d d d d d d
a. Retaineddearningsdshoulddbedreduceddbyd$200,000.
b. Currentdassetsdshoulddbedrecordeddatd$685,000danddnoncurrentdassetsdrecordedda
t
$515,000.
c. Thednoncurrentdassetsdshoulddbedrecordeddatd$400,000.
d. Addeferreddcreditdofd$200,000dshoulddbedsetdupdanddsubsequentlydamortizeddto
dfuture netincome over a period not to exceed 40 years.
d d d d d d d d d d
7. ABCdCo.disdacquiringdXYZdInc.dXYZdhasdthedfollowingdIntangibledassets:dPaten
t on a product that is deemed to have no useful life $10,000. Customer List wi
d d d d d d d d d d d d d d d
th an observablefair value of $50,000. A 5-
d d d d d d d d
year operating lease with favorable terms with a discounted present value of
d d d d d d d d d d d d
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
, $8,000. Identifiable R & D of $100,000.
d d d d d d
ABC will record how much for acquired Intangible Assets fr
d d d d d d d d d
a. $168,000
om thedPurchasedofdXYZdInc?
b. d$58,000
c. $158,000
d. $150,000
8. VibedCompanydpurchaseddthednetdassetsdofdAtlanticdCompanydindadbusinessdcomb
ination accounted for as a purchase. As a result, goodwill was recorded. For tax
d d d d d d d d d d d d d d
purposes, this combination was considered to be a tax-
d d d d d d d d
free merger. Included in the assets is a building with an appraised value of $210,
d d d d d d d d d d d d d d
000 on the date of the business combination. This asset had a net book value of $
d d d d d d d d d d d d d d d d
70,000, based on the use of accelerated depreciation for accounting purposes. T
d d d d d d d d d d d
he building had an adjusted tax basis to Atlantic (and to Vibe as a result of the m
d d d d d d d d d d d d d d d d d
erger) of $120,000. Assuming a 36% income tax rate, at what amount shouldVi
d d d d d d d d d d d d d
be record this building on its books after the purchase?
d d d d d d d d d
a. $120,000
b. $134,400
c. $140,000
d. $210,000
9. Goodwilldrepresentsdthedexcessdcostdofdandacquisitiondoverdthe
a. sumdofdthedfairdvaluesdassigneddtodintangibledassetsdlessdliabilitiesdassumed.
b. sumdofdthedfairdvaluesdassigneddtodtangibledanddintangibledassetsdacquireddles
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
d d d d d d
tion, Fischer, Taylor & Cheng d d d d
YOU CAN FIND MORE QUESTIONS AND ANSWERS, just go HERE
d d d d d d d d d
MULTIPLE CHOICE d
1. Andeconomicdadvantagedofdadbusinessdcombinationdincludes
a. Utilizingdduplicativedassets.
b. Creatingdseparatedmanagementdteams.
c. Coordinateddmarketingdcampaigns.
d. Horizontallydcombiningdlevelsdwithindthedmarketingdchain.
2. Adtaxdadvantagedofdbusinessdcombinationdcandoccurdwhendthedexistingdownerdofd
a companysells out and receives:
d d d d d
a. cashdtoddeferdthedtaxabledgaindasdad"tax-freedreorganization."
b. stockdtoddeferdthedtaxabledgaindasdad"tax-freedreorganization."
c. cashdtodcreatedadtaxabledgain.
d. stockdtodcreatedadtaxabledgain.
3. Adcontrollingdinterestdindadcompanydimpliesdthatdthedparentdcompany
a. ownsdalldofdthedsubsidiary'sdstock.
b. hasdinfluencedoverdadmajoritydofdthedsubsidiary'sdassets.
c. hasdpaiddcashdfordadmajoritydofdthedsubsidiary'sdstock.
d. hasdtransferreddcommondstockdfordadmajoritydofdthedsubsidiary'sdoutstandingd
bonds anddebentures.
d d
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
,4. Whichdofdthedfollowingdisdadpotentialdabusedthatdmaydarisedwhendadbusinessdcom
bination isaccounted for as a pooling of interests?
d d d d d d d d
a. Assetsdofdthedbuyerdmaydbedovervalueddwhendthedpricedpaiddbydthedinvestordi
s allocatedamong specific assets.
d d d d
b. Earningsdofdthedpooleddentitydmaydbedincreaseddbecausedofdthedcombinationdo
nly and notas a result of efficient operations.
d d d d d d d d
c. Liabilitiesdmaydbedundervalueddwhendthedpricedpaiddbydthedinvestordisdal
located tospecific liabilities.
d d d
d. Andunduedamountdofdcostdmaydbedassigneddtodgoodwill,dthusdpotentiallydal
lowing anunderstatement of pooled earnings.
d d d d d
5. Company B acquired the assets (net of liabilities) of Company S in exchange fo
d d d d d d d d d d d d d
r cash. Theacquisition price exceeds the fair value of the net assets acquired. Ho
d d d d d d d d d d d d d d
w should Company Bdetermine the amounts to be reported for the plant and eq
d d d d d d d d d d d d d d
uipment, and for long-term debt of the acquired Company S?
d d d d d d d d d
d Plant and Equipment
d d Long-Term Debt d
a. Fair value d S's carrying amount
d d
b. Fair value d Fair value d
c. S's carrying amount
d d Fair value d
d. S's carrying amount
d d S's carrying amount
d d
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
,6. PublicsdCompanydacquireddthednetdassetsdofdCitizendCompanydduri
ng 20X5.The purchase price was $800,000. On the date of the tra
d d d d d d d d d d d d
nsaction,
Citizen had no long- d d d
term investments in marketable equity securitiesand $400,0
d d d d d d d
00 in liabilities. The fair value of Citizen assets on the acqui
d d d d d d d d d d d
sition date was as follows: d d d d
Current assets................................. $ 800,000
d d d
Noncurrent assets. .................. 600,000 d
$1,400,000
==========
How should Publics account for the $200,000 difference between the fair valu
d d d d d d d d d d d
e of the netassets acquired, $1,000,000, and the cost, $800,000?
d d d d d d d d d d
a. Retaineddearningsdshoulddbedreduceddbyd$200,000.
b. Currentdassetsdshoulddbedrecordeddatd$685,000danddnoncurrentdassetsdrecordedda
t
$515,000.
c. Thednoncurrentdassetsdshoulddbedrecordeddatd$400,000.
d. Addeferreddcreditdofd$200,000dshoulddbedsetdupdanddsubsequentlydamortizeddto
dfuture netincome over a period not to exceed 40 years.
d d d d d d d d d d
7. ABCdCo.disdacquiringdXYZdInc.dXYZdhasdthedfollowingdIntangibledassets:dPaten
t on a product that is deemed to have no useful life $10,000. Customer List wi
d d d d d d d d d d d d d d d
th an observablefair value of $50,000. A 5-
d d d d d d d d
year operating lease with favorable terms with a discounted present value of
d d d d d d d d d d d d
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
, $8,000. Identifiable R & D of $100,000.
d d d d d d
ABC will record how much for acquired Intangible Assets fr
d d d d d d d d d
a. $168,000
om thedPurchasedofdXYZdInc?
b. d$58,000
c. $158,000
d. $150,000
8. VibedCompanydpurchaseddthednetdassetsdofdAtlanticdCompanydindadbusinessdcomb
ination accounted for as a purchase. As a result, goodwill was recorded. For tax
d d d d d d d d d d d d d d
purposes, this combination was considered to be a tax-
d d d d d d d d
free merger. Included in the assets is a building with an appraised value of $210,
d d d d d d d d d d d d d d
000 on the date of the business combination. This asset had a net book value of $
d d d d d d d d d d d d d d d d
70,000, based on the use of accelerated depreciation for accounting purposes. T
d d d d d d d d d d d
he building had an adjusted tax basis to Atlantic (and to Vibe as a result of the m
d d d d d d d d d d d d d d d d d
erger) of $120,000. Assuming a 36% income tax rate, at what amount shouldVi
d d d d d d d d d d d d d
be record this building on its books after the purchase?
d d d d d d d d d
a. $120,000
b. $134,400
c. $140,000
d. $210,000
9. Goodwilldrepresentsdthedexcessdcostdofdandacquisitiondoverdthe
a. sumdofdthedfairdvaluesdassigneddtodintangibledassetsdlessdliabilitiesdassumed.
b. sumdofdthedfairdvaluesdassigneddtodtangibledanddintangibledassetsdacquireddles
Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
d d d d d d d d d
& Cheng d
