Test Bank For Advanced Accounting, 11th Edition All Chapters - 9781260247824.pdf

TEST N




BANK

Advanced N




Accountin N




g
Part 2
N

, ALLNRIGHTSNRESERVEDN
2015




NoNpartNofNthisNworkNcoveredNby
NtheNcopyright Nhereon Nmay NbeNr


eproducedNorNusedNinNanyNformN
orNbyNanyNmeansN-
Nelectronic NorNmechanical,


including
Nphotocopying N–


Nwithout NtheNwritten Npermission N


ofNtheN author.




ISBNN978-621-95096-5-7




PublishedNby:
BANDOLIN ENTERPRISE
N

No.N100NMontebelloNVillage,NBakakengNSur,NBaguioNCityN2600
,NPhilippines

, TABLE OF CONTENTS
N N




CHAPTERN13
BUSINESSNCOMBINATIONSN(PARTN1)..................... 1
OVERVIEWN ONN THEN TOPIC................................................................... 1
INTRODUCTION ......................................................................................... 1
OBJECTIVE ................................................................................................. 4
SCOPE ......................................................................................................... 5
DEFINITIONN OFN BUSINESSN COMBINATION ...................................... 5
EssentialNelementsNinNtheNdefinitionNofNaNbusinessNcombinationN5
ACCOUNTINGN FORN BUSINESSN COMBINATION ............................... 7
IDENTIFYINGN THEN ACQUIRER .............................................................. 8
DETERMININGN THEN ACQUISITIONN DATE ...................................... 10
RECOGNIZINGN ANDN MEASURINGN GOODWILL ............................ 11
ConsiderationNtransferred ....................................... 12
Non-controllingNinterest ........................................... 12
PreviouslyNheldNequityNinterestNinNtheNacquiree13N
NetNidentifiableNassetsNacquired ........................... 13
RESTRUCTURINGNPROVISIONS ........................................................ 22
SPECIFICN RECOGNITIONN PRINCIPLES ............................................ 23
1. OperatingNleases ................................................... 23
2. IntangibleNassets .................................................. 26
EXCEPTIONN TON THEN RECOGNITIONN PRINCIPLEN –N CONTINGENTN LIABILITIES 32
EXCEPTIONSN TON BOTHN THEN RECOGNITIONN ANDN MEASUREMENTN PRINCIPLES 34
AdditionalNconceptsNonNConsiderationNtransferred 37
EXCEPTIONSN TON THEN MEASUREMENTN PRINCIPLE ................... 40
CHAPTERN13:NSUMMARY................................................................. 43
CHAPTERN13:NMULTIPLENCHOICEN–
NTHEORYN(FORNCLASSROOMNINSTRUCTIONNPURPOSES) . 44

CHAPTERN13:NMULTIPLENCHOICEN–
NCOMPUTATIONAL N(FOR NCLASSROOMNINSTRUCTION NPURPOSES )

.............................................................................................. 48
CHAPTERN 13:N EXERCISESN (FORN CLASSROOMN INSTRUCTIONN PURPOSES) 55

CHAPTERN14
BUSINESSNCOMBINATIONSN(PARTN2)...................63
SHARE-FOR-SHARENEXCHANGES.................................................... 63
BUSINESSN COMBINATIONN ACHIEVEDN INN STAGES .................... 67
BUSINESSN COMBINATIONN ACHIEVEDN WITHOUTN TRANSFERN OFN CONSIDERATION 70
MEASUREMENTN PERIOD ..................................................................... 73
DETERMININGN WHATN ISN PARTN OFN THEN BUSINESSN COMBINATIONN TRANSACTION 79
ReacquiredN rights ....................................................... 82
SettlementNofNpre-
existingNrelationshipsNbetweenNtheNacquirerNandNacquiree 82
SUBSEQUENTN MEASUREMENTN ANDN ACCOUNTING .................. 89
DISCLOSURES ....................................................................................... 96
CHAPTERN14:NSUMMARY................................................................. 96
CHAPTERN14:NMULTIPLENCHOICEN–
NTHEORYN(FORNCLASSROOMNINSTRUCTIONNPURPOSES) . 97

CHAPTERN14:NMULTIPLENCHOICEN–
NCOMPUTATIONAL N(FOR NCLASSROOMNINSTRUCTION NPURPOSES )

.............................................................................................. 99
CHAPTERN 14:N EXERCISESN (FORN CLASSROOMN INSTRUCTIONN PURPOSES)
. ..........................................................................................108

, SPECIALNACCOUNTINGNTOPICSNFORNBUSINESSNCOMBINATION115N
GOODWILL............................................................................................. 115
DueNdiligence ............................................................ 116
MethodsNofNestimatingNgoodwill ......................... 117
REVERSENACQUISITIONS.................................................................. 122
COMBINATIONNOFNMUTUALNENTITIES ....................................... 126
CHAPTERN15:NSUMMARY.............................................................. 127
CHAPTERN15:NMULTIPLENCHOICEN–
NTHEORYN(FORNCLASSROOMNINSTRUCTIONNPURPOSES) 127
CHAPTERN15:NMULTIPLENCHOICEN–
NCOMPUTATIONAL N(FOR NCLASSROOMNINSTRUCTION NPURPOSES )

............................................................................................128
CHAPTERN 15:N EXERCISESN (FORN CLASSROOMN INSTRUCTIONN PURPOSES)
. ..........................................................................................132
CHAPTERN 15:N THEORYN OFN ACCOUNTSN REVIEWER ........... 134
CHAPTERN 15N-N SUGGESTEDN ANSWERSN TON THEORYN OFN ACCOUNTSN QUESTIONS
. ..........................................................................................141

CHAPTERN16
CONSOLIDATEDNFINANCIALNSTATEMENTSN(PARTN1) 142
OVERVIEWN ONN THEN TOPIC............................................................. 142
SCOPE ................................................................................................... 143
CONTROL.............................................................................................. 143
POWER .................................................................................................. 144
AdministrativeN rights .............................................. 145
UnilateralNrights ........................................................ 145
ProtectiveN rights ....................................................... 145
SubstantiveN rights ................................................... 146
VotingNrights .............................................................. 147
SubstantiveNremovalNandNotherNrightsNheldNbyNotherNparties
. ...................................................................................... 151
EXPOSUREN ORN RIGHTSN TON VARIABLEN RETURNS .................. 151
ABILITYN TON USEN ITSN POWERN TON AFFECTN INVESTOR’SN RETURNS 151
ACCOUNTINGN REQUIREMENTS ..................................................... 152
UniformNaccountingNpolicies ................................ 152
ReportingNdate .......................................................... 152
ConsolidationNperiod............................................... 153
Measurement ............................................................ 153
NON-CONTROLLINGN INTERESTSN (NCI) .............................154
PREPARINGNTHENCONSOLIDATEDNFINANCIALNSTATEMENTS154
NCONSOLIDATION NAT NDATE NOF NACQUISITION ...................... 155

CONSOLIDATIONN SUBSEQUENTN TON DATEN OFN ACQUISITION162
StepN1:NAnalysisNofNeffectsNofNintercompanyNtransaction 162
StepN2:NAnalysisNofNnetNassets............................... 162
StepN3:NGoodwillNcomputation ............................. 163
StepN4:NNon-
controllingNinterestNinNnetNassets164NStepN5:NCons
olidatedNretainedNearnings ................................... 164
StepN6:NConsolidatedNprofitNorNloss ..................... 164
StepN7:NProfitNorNlossNattributableNtoNownersNofNparentNandNNCI
. ...................................................................................... 165
SUBSIDIARY’SN OUTSTANDINGN CUMULATIVEN PREFERENCEN SHARES 180
CHAPTERN16:NSUMMARY.............................................................. 181
CHAPTERN16:NMULTIPLENCHOICEN–

NTHEORYN(FORNCLASSROOMNINSTRUCTIONNPURPOSES) 184