Test Bank for Advanced Financial Accounting
13th Edition
By Theodore Christensen
,TEST BANK FOR
T T
Advanced Financial Accounting 13th Edition By Theodore Christensen
T T T T T T T
ChapterT1 IntercorporateT AcquisitionsT andT InvestmentsT inT OtherT Entities
1) AssumingT noT impairmentT inT valueT priorT toT transfer,T assetsTtransferredT byTaT parentT companyT to
anotherT entityT itT hasT createdT shouldT beT recordedT byTtheT newlyT createdT entityTatT theT assets':
T
A) costTtoT theT parentT company.
B) bookT valueT onTtheT parentT company'sT booksT atT theT dateT ofTtransfer.
C) fairT valueT atT theT dateT ofTtransfer.
D) fairTvalueTofTconsiderationTexchangedTbyTtheTnewlyTcreatedTentity.
Answer:T BTDiffic
ulty:T1TEasy
Topic:TInternalTExpansion:TCreatingTaTBusinessTEntity;TValuationTofTBusinessTEntitiesTLearni
ngTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT ty
pesT ofT organizationalT structures,T andT theT typesT ofT acquisitions.;T 01T-
03TMakeT calculationsTandT prepareT journalTentriesT forT theT creationT ofTaT businessT entity.
Bloom's:
RememberTAACSB:
T ReflectiveTThinking T AICPA:
FNT DecisionT Making
2) GivenTtheTincreasedTdevelopmentTofTcomplexTbusinessTstructures,TwhichTofTtheTfollowingTre
gulatorsTisTresponsibleT forTtheTcontinuedTusefulnessTofTaccountingTreports?
A) SecuritiesT andT ExchangeT CommissionT (SEC)
B) PublicT CompanyT AccountingT OversightT BoardT (PCAOB)
C) FinancialT AccountingT StandardsT BoardT (FASB)
D) AllT ofTtheT otherT answersT areT correct
Answer:T DTDiffic
ulty:T1TEasy
Topic: AnT IntroductionT toT ComplexT BusinessT Structures
LearningTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT t
ypesT ofTorganizationalT structures,T andT theT typesT ofTacquisitions.
Bloom's:
RememberTAACSB
:T ReflectiveTThinkingTAICPA:
FNTReporting
3) ATbusinessTcombinationTinTwhichTtheTacquiredTcompany'sTassetsTandTliabilitiesTareTcombinedTwi
thTthoseTofTtheTacquiringT companyTintoTaT singleT entityTisTdefinedTas:
A) StockTacquisition
B) LeveragedTbuyout
C) StatutoryTMerger
,D) ReverseT statutoryT rollup
, Answer:T CTDiffic
ulty:T1TEasy
Topic: OrganizationalT StructureT andT FinancialT Reporting
LearningTObjective: 01-
04TUnderstandTandTexplainTtheTdifferencesTbetweenTdifferentTformsTofTbusinessTcombinations.
Bloom's:
RememberTAACSB:
T ReflectiveTThinking T
AICPA:
FNT DecisionT Making
4) InT whichT ofTtheT followingT situationsT doT accountingT standardsT notT requireT thatT theT financial
statementsTofTtheTparentT andT subsidiaryTbeTconsolidated?
T
A) ATcorporationTcreatesTaTnewT100TpercentT ownedTsubsidiary
B) AT corporationT purchasesT 90T percentT ofTtheT votingT stockT ofT anotherT company
C) AT corporationT hasT bothT controlT andT majorityT ownershipT ofTanT unincorporatedT company
D) AT corporationT ownsT less-thanT aT controllingT interestT inT anT unincorporatedT company
Answer:T DTDiffic
ulty:T1TEasy
Topic: OrganizationalT StructureT andT FinancialT Reporting
LearningTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT typ
esT ofT organizationalT structures,T andT theT typesT ofTacquisitions.
Bloom's:
RememberTAACSB:
T ReflectiveTThinking T AICPA:
FNT DecisionT Making
DuringTitsTinception,TDevonTCompanyTpurchasedTlandTforT$100,000TandTaTbuildingTforT$180,000.
TAfterTexactlyT3T years,TitTtransferredTtheseTassetsTandTcashTofT$50,000TtoTaTnewlyTcreatedTsubsidiary,T
ReganTCompany,TinTexchangeTforT15,000TsharesTofTRegan'sT$10TparTvalueTstock.TDevonTusesTstr
aight-
lineTdepreciation.TUsefulTlifeTforTtheTbuildingTisT30Tyears,TwithTzeroTresidualTvalue.TAnTappraisalT
revealedTthatTtheTbuildingThasTaT fairT valueTofT$200,000.
5) BasedT onTtheT informationT provided,T atT theT timeT ofT theT transfer,T ReganT CompanyT shouldT record:
A) BuildingT atT $180,000T andT noT accumulatedT depreciation.
B) BuildingT atT $162,000T andT noT accumulatedT depreciation.
C) BuildingT atT $200,000T andT accumulatedT depreciationT ofT $24,000.
D) BuildingT atT $180,000T andT accumulatedT depreciationT ofT $18,000.
Answer:TTDTDifficult
y:T 2T Medium
Topic:
ValuationT ofT BusinessT Entities;T AccountingT forT InternalT Expansion:T CreatingT Business
T Entities
LearningTObjective: 01-
04TUnderstandTandTexplainTtheTdifferencesTbetweenTdifferentTformsTofTbusinessT combinations.;T 0
1-03T MakeT calculationsT andT prepareT journalT entriesT forT theT creationT ofTaTbusinessTentity.
Bloom's:
UnderstandTAACSB
13th Edition
By Theodore Christensen
,TEST BANK FOR
T T
Advanced Financial Accounting 13th Edition By Theodore Christensen
T T T T T T T
ChapterT1 IntercorporateT AcquisitionsT andT InvestmentsT inT OtherT Entities
1) AssumingT noT impairmentT inT valueT priorT toT transfer,T assetsTtransferredT byTaT parentT companyT to
anotherT entityT itT hasT createdT shouldT beT recordedT byTtheT newlyT createdT entityTatT theT assets':
T
A) costTtoT theT parentT company.
B) bookT valueT onTtheT parentT company'sT booksT atT theT dateT ofTtransfer.
C) fairT valueT atT theT dateT ofTtransfer.
D) fairTvalueTofTconsiderationTexchangedTbyTtheTnewlyTcreatedTentity.
Answer:T BTDiffic
ulty:T1TEasy
Topic:TInternalTExpansion:TCreatingTaTBusinessTEntity;TValuationTofTBusinessTEntitiesTLearni
ngTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT ty
pesT ofT organizationalT structures,T andT theT typesT ofT acquisitions.;T 01T-
03TMakeT calculationsTandT prepareT journalTentriesT forT theT creationT ofTaT businessT entity.
Bloom's:
RememberTAACSB:
T ReflectiveTThinking T AICPA:
FNT DecisionT Making
2) GivenTtheTincreasedTdevelopmentTofTcomplexTbusinessTstructures,TwhichTofTtheTfollowingTre
gulatorsTisTresponsibleT forTtheTcontinuedTusefulnessTofTaccountingTreports?
A) SecuritiesT andT ExchangeT CommissionT (SEC)
B) PublicT CompanyT AccountingT OversightT BoardT (PCAOB)
C) FinancialT AccountingT StandardsT BoardT (FASB)
D) AllT ofTtheT otherT answersT areT correct
Answer:T DTDiffic
ulty:T1TEasy
Topic: AnT IntroductionT toT ComplexT BusinessT Structures
LearningTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT t
ypesT ofTorganizationalT structures,T andT theT typesT ofTacquisitions.
Bloom's:
RememberTAACSB
:T ReflectiveTThinkingTAICPA:
FNTReporting
3) ATbusinessTcombinationTinTwhichTtheTacquiredTcompany'sTassetsTandTliabilitiesTareTcombinedTwi
thTthoseTofTtheTacquiringT companyTintoTaT singleT entityTisTdefinedTas:
A) StockTacquisition
B) LeveragedTbuyout
C) StatutoryTMerger
,D) ReverseT statutoryT rollup
, Answer:T CTDiffic
ulty:T1TEasy
Topic: OrganizationalT StructureT andT FinancialT Reporting
LearningTObjective: 01-
04TUnderstandTandTexplainTtheTdifferencesTbetweenTdifferentTformsTofTbusinessTcombinations.
Bloom's:
RememberTAACSB:
T ReflectiveTThinking T
AICPA:
FNT DecisionT Making
4) InT whichT ofTtheT followingT situationsT doT accountingT standardsT notT requireT thatT theT financial
statementsTofTtheTparentT andT subsidiaryTbeTconsolidated?
T
A) ATcorporationTcreatesTaTnewT100TpercentT ownedTsubsidiary
B) AT corporationT purchasesT 90T percentT ofTtheT votingT stockT ofT anotherT company
C) AT corporationT hasT bothT controlT andT majorityT ownershipT ofTanT unincorporatedT company
D) AT corporationT ownsT less-thanT aT controllingT interestT inT anT unincorporatedT company
Answer:T DTDiffic
ulty:T1TEasy
Topic: OrganizationalT StructureT andT FinancialT Reporting
LearningTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT typ
esT ofT organizationalT structures,T andT theT typesT ofTacquisitions.
Bloom's:
RememberTAACSB:
T ReflectiveTThinking T AICPA:
FNT DecisionT Making
DuringTitsTinception,TDevonTCompanyTpurchasedTlandTforT$100,000TandTaTbuildingTforT$180,000.
TAfterTexactlyT3T years,TitTtransferredTtheseTassetsTandTcashTofT$50,000TtoTaTnewlyTcreatedTsubsidiary,T
ReganTCompany,TinTexchangeTforT15,000TsharesTofTRegan'sT$10TparTvalueTstock.TDevonTusesTstr
aight-
lineTdepreciation.TUsefulTlifeTforTtheTbuildingTisT30Tyears,TwithTzeroTresidualTvalue.TAnTappraisalT
revealedTthatTtheTbuildingThasTaT fairT valueTofT$200,000.
5) BasedT onTtheT informationT provided,T atT theT timeT ofT theT transfer,T ReganT CompanyT shouldT record:
A) BuildingT atT $180,000T andT noT accumulatedT depreciation.
B) BuildingT atT $162,000T andT noT accumulatedT depreciation.
C) BuildingT atT $200,000T andT accumulatedT depreciationT ofT $24,000.
D) BuildingT atT $180,000T andT accumulatedT depreciationT ofT $18,000.
Answer:TTDTDifficult
y:T 2T Medium
Topic:
ValuationT ofT BusinessT Entities;T AccountingT forT InternalT Expansion:T CreatingT Business
T Entities
LearningTObjective: 01-
04TUnderstandTandTexplainTtheTdifferencesTbetweenTdifferentTformsTofTbusinessT combinations.;T 0
1-03T MakeT calculationsT andT prepareT journalT entriesT forT theT creationT ofTaTbusinessTentity.
Bloom's:
UnderstandTAACSB
