Test Bank For Advanced Financial Accounting 13th Edition By Theodore Christensen|9781260772135| All Chapters 1-20| LATEST

Test Bank for Advanced Financial Accounting 13t
+y +y +y +y +y +y+ y




h Edition
+y + y




By Theodore Christensen
+ y + y

,TEST BANK FOR +y +y



Advanced Financial Accounting 13th Edition By Theodore Christensen
+y +y +y +y +y +y +y




Chapter 1 Intercorporate Acquisitions and Investments in Other Entities
+y + y + y +y + y +y +y




1) Assuming no impairment in value prior to transfer, assets transferred by a parent company
+y +y +y +y +y +y +y +y +y +y +y +y +y +


to another entity it has created should be recorded by the newly created entity at the asset
y +y +y +y +y +y +y +y +y +y +y +y +y +y +y +y +y


s':
A) cost to the parent company.
+y +y +y +y


B) book value on the parent company's books at the date of transfer.
+y +y +y +y +y +y +y +y +y +y +y


C) fair value at the date of transfer.
+y +y +y +y +y +y


D) fair value of consideration exchanged by the newly created entity.
+y +y +y +y +y +y +y +y +y




Answer: B Diffi +y +y


culty: 1 Easy +y +y


Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Lea
+ y +y +y +y +y +y +y +y +y +y +y


rning Objective: 01-
+y


01 Understand and explain the reasons for and different methods of business expansion, th
+y +y +y +y +y +y +y +y +y +y +y +y +y


e types of organizational structures, and the types of acquisitions.; 01 -
+y +y +y +y +y +y +y +y +y +y +y


03 Make calculations and prepare journal entries for the creation of a business entity.
+y +y +y +y +y +y +y +y +y +y +y +y +y


Bloom's:
Remember AACSB +y


: Reflective Thinking AICP
+ y +y +y


A:
FN Decision Makin +y +y


g

2) Given the increased development of complex business structures, which of the followi
+y +y +y +y +y +y +y +y +y +y +y


ng regulators is responsible for the continued usefulness of accounting reports?
+y +y +y +y +y +y +y +y +y +y


A) Securities and Exchange Commission (SEC) +y + y +y +y


B) Public Company Accounting Oversight Board (PCAOB)
+y + y +y + y +y


C) Financial Accounting Standards Board (FASB) + y +y +y +y


D) All of the other answers are correct
+y +y +y +y +y +y




Answer: D Diffi +y +y


culty: 1 Easy +y +y


Topic: An Introduction to Complex Business Structures
+y +y +y +y + y


Learning Objective: 01- +y


01 Understand and explain the reasons for and different methods of business expansion, t
+y +y +y +y +y +y +y +y +y +y +y +y +y


he types of organizational structures, and the types of acquisitions.
+y +y +y +y +y +y +y +y +y


Bloom's:
Remember AACSB +y


: Reflective Thinking AICP
+ y +y +y


A: FN Reporting +y




3) A business combination in which the acquired company's assets and liabilities are combin
+y +y +y +y +y +y +y +y +y +y +y +y


ed with those of the acquiring company into a single entity is defined as:
+y +y +y +y +y +y +y +y +y +y +y +y +y

,A) Stock acquisition
+y


B) Leveraged buyout + y


C) Statutory Merger
+y


D) Reverse statutory rollup
+ y +y

, Answer: C Diffi +y +y


culty: 1 Easy +y +y


Topic: Organizational Structure and Financial Reporting +y +y +y +y


Learning Objective: 01- +y


04 Understand and explain the differences between different forms of business combinations
+y +y +y +y +y +y +y +y +y +y +y


.
Bloom's:
Remember AACSB +y


: Reflective Thinking AICP
+ y +y +y


A:
FN Decision Makin +y +y


g

4) In which of the following situations do accounting standards not require that the financ
+y +y +y +y +y +y +y +y +y +y +y +y +y


ial statements of the parent and subsidiary be consolidated?
+y +y +y +y +y +y +y +y


A) A corporation creates a new 100 percent owned subsidiary
+y +y +y +y +y +y +y +y


B) A corporation purchases 90 percent of the voting stock of another company
+y +y +y +y +y +y +y +y +y +y +y


C) A corporation has both control and majority ownership of an unincorporated company
+y +y +y +y +y + y +y +y +y +y +y


D) A corporation owns less-than a controlling interest in an unincorporated company
+y +y +y +y + y + y + y +y +y +y




Answer: D Diffi +y +y


culty: 1 Easy +y +y


Topic: Organizational Structure and Financial Reporting +y +y +y +y


Learning Objective: 01- +y


01 Understand and explain the reasons for and different methods of business expansion, t
+y +y +y +y +y +y +y +y +y +y +y +y +y


he types of organizational structures, and the types of acquisitions.
+y +y +y +y +y +y +y +y +y


Bloom's:
Remember AACSB +y


: Reflective Thinking AICP
+ y +y +y


A:
FN Decision Makin +y +y


g

During its inception, Devon Company purchased land for $100,000 and a building for $180,0
+y +y +y +y +y +y +y +y +y +y +y +y +y


00. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subs
+y +y +y +y +y +y +y +y +y +y +y +y +y +y +y +y +y


idiary, Regan Company, in exchange for 15,000 shares of Regan's $10 par value stock. Dev
+y +y +y +y +y +y +y +y +y +y +y +y +y +y


on uses straight-
+y +y


line depreciation. Useful life for the building is 30 years, with zero residual value. An appra
+y +y +y +y +y +y +y +y +y +y +y +y +y +y +y


isal revealed that the building has a fair value of $200,000.
+y +y +y +y +y +y +y +y +y +y




5) Based on the information provided, at the time of the transfer, Regan Company should record:
+y +y +y +y +y +y +y +y +y +y +y +y +y +y


A) Building at $180,000 and no accumulated depreciation.
+y + y +y +y +y +y


B) Building at $162,000 and no accumulated depreciation.
+y +y +y +y +y + y


C) Building at $200,000 and accumulated depreciation of $24,000.
+y + y + y +y + y +y +y


D) Building at $180,000 and accumulated depreciation of $18,000.
+y + y +y +y +y +y +y




Answer: D Difficult +y +y


y: 2 Medium
+y +y


Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Busines
+y +y +y +y +y +y +y +y +y


s Entities
+y