Test Bank For Advanced Accounting 9th Edition, Fischer, Taylor & Cheng

Test Bank For Advanced Accounting 9thEdi
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tion, Fischer, Taylor & Cheng d d d d




YOU CAN FIND MORE QUESTIONS AND ANSWERS, just go HERE
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MULTIPLE CHOICE d




1. Andeconomicdadvantagedofdadbusinessdcombinationdincludes

a. Utilizingdduplicativedassets.

b. Creatingdseparatedmanagementdteams.

c. Coordinateddmarketingdcampaigns.

d. Horizontallydcombiningdlevelsdwithindthedmarketingdchain.

2. Adtaxdadvantagedofdbusinessdcombinationdcandoccurdwhendthedexistingdownerdofd

a companysells out and receives:
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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.
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Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
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& Cheng d

,4. Whichdofdthedfollowingdisdadpotentialdabusedthatdmaydarisedwhendadbusinessdcom

bination isaccounted for as a pooling of interests?
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a. Assetsdofdthedbuyerdmaydbedovervalueddwhendthedpricedpaiddbydthedinvestordi

s allocatedamong specific assets.
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b. Earningsdofdthedpooleddentitydmaydbedincreaseddbecausedofdthedcombinationdo

nly and notas a result of efficient operations.
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c. Liabilitiesdmaydbedundervalueddwhendthedpricedpaiddbydthedinvestordisdal

located tospecific liabilities.
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d. Andunduedamountdofdcostdmaydbedassigneddtodgoodwill,dthusdpotentiallydal

lowing anunderstatement of pooled earnings.
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5. Company B acquired the assets (net of liabilities) of Company S in exchange fo
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r cash. Theacquisition price exceeds the fair value of the net assets acquired. Ho
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w should Company Bdetermine the amounts to be reported for the plant and eq
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uipment, and for long-term debt of the acquired Company S?
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d Plant and Equipment
d d Long-Term Debt d



a. Fair value d S's carrying amount
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b. Fair value d Fair value d



c. S's carrying amount
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d. S's carrying amount
d d S's carrying amount
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Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
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& Cheng d

,6. PublicsdCompanydacquireddthednetdassetsdofdCitizendCompanydduri

ng 20X5.The purchase price was $800,000. On the date of the tra
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nsaction,
Citizen had no long- d d d



term investments in marketable equity securitiesand $400,0
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00 in liabilities. The fair value of Citizen assets on the acqui
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sition date was as follows: d d d d




Current assets................................. $ 800,000
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Noncurrent assets. .................. 600,000 d



$1,400,000
==========

How should Publics account for the $200,000 difference between the fair valu
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e of the netassets acquired, $1,000,000, and the cost, $800,000?
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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.
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7. ABCdCo.disdacquiringdXYZdInc.dXYZdhasdthedfollowingdIntangibledassets:dPaten

t on a product that is deemed to have no useful life $10,000. Customer List wi
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th an observablefair value of $50,000. A 5-
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year operating lease with favorable terms with a discounted present value of
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Test Bank For Advanced Accounting 9thEdition, Fischer, Taylor
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& Cheng d

, $8,000. Identifiable R & D of $100,000.
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ABC will record how much for acquired Intangible Assets fr
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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
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purposes, this combination was considered to be a tax-
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free merger. Included in the assets is a building with an appraised value of $210,
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000 on the date of the business combination. This asset had a net book value of $
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70,000, based on the use of accelerated depreciation for accounting purposes. T
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he building had an adjusted tax basis to Atlantic (and to Vibe as a result of the m
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erger) of $120,000. Assuming a 36% income tax rate, at what amount shouldVi
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be record this building on its books after the purchase?
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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
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& Cheng d