MODERN ADVANCED ACCOUNTING
FINAL PAPER TESTED QUESTIONS WITH
VERIFIED ANSWERS COMPLETE STUDY
SHEET
●● Equity
Answer: When a parent company acquires additional shares of an
already controlled subsidiary, the acquisition is accounted for as an ___
transaction.
●● an ownership interest in a subsidiary held by owners other than the
parent company.
Answer: A noncontrolling interest in a consolidated entity may be
described as
●● the fair value of the controlling interest.
the fair value of the noncontrolling interest.
Answer: When a parent acquires a controlling, but less-than-100%
interest in a subsidiary, the basic elements for establishing an
acquisition-date subsidiary value include
,●● does not always result in an allocation proportional to percentage
ownership interests.
compares acquisition date total fair values to the relative (proportional)
fair values of the subsidiary's identifiable net assets.
Answer: The allocation of goodwill across the controlling and
noncontrolling interests
●● Economic Unit
Answer: Following the ___ ___ concept, a parent includes 100% of a
subsidiary's net income in consolidated net income even when the parent
owns less than 100% of its controlled subsidiary's voting stock.
●● The parent may not have had sufficient resources available to obtain
all of the outstanding stock.
the laws of some countries prevent complete ownership by a foreign
firm.
some outside owners of the subsidiary company may have been
unwilling to sell their shares.
Answer: Which of the following are reasons for one company to gain
control over another with less than 100% ownership?
, ●● The consolidated entity's net income attributable to the non-
controlling interest.
The balance of the noncontrolling interest as of the beginning of the
period.
Dividends from the subsidiary attributable to the noncontrolling interest
Answer: As part of the consolidation process which of the following are
included in the calculation of the ending balance of the noncontrolling
interest?
●● Shareholders' equity section
Answer: The amount for the noncontrolling interest is reported in the
consolidated balance sheet in the
●● A deduction for 80% of subsidiary dividends declared since
acquisition.
80% of post-acquisition subsidiary earnings adjusted for excess
acquisition-date fair value amortizations.
Answer: For an 80% owned subsidiary accounted for under the equity
method, the parent includes in the Investment in Subsidiary account
balance
FINAL PAPER TESTED QUESTIONS WITH
VERIFIED ANSWERS COMPLETE STUDY
SHEET
●● Equity
Answer: When a parent company acquires additional shares of an
already controlled subsidiary, the acquisition is accounted for as an ___
transaction.
●● an ownership interest in a subsidiary held by owners other than the
parent company.
Answer: A noncontrolling interest in a consolidated entity may be
described as
●● the fair value of the controlling interest.
the fair value of the noncontrolling interest.
Answer: When a parent acquires a controlling, but less-than-100%
interest in a subsidiary, the basic elements for establishing an
acquisition-date subsidiary value include
,●● does not always result in an allocation proportional to percentage
ownership interests.
compares acquisition date total fair values to the relative (proportional)
fair values of the subsidiary's identifiable net assets.
Answer: The allocation of goodwill across the controlling and
noncontrolling interests
●● Economic Unit
Answer: Following the ___ ___ concept, a parent includes 100% of a
subsidiary's net income in consolidated net income even when the parent
owns less than 100% of its controlled subsidiary's voting stock.
●● The parent may not have had sufficient resources available to obtain
all of the outstanding stock.
the laws of some countries prevent complete ownership by a foreign
firm.
some outside owners of the subsidiary company may have been
unwilling to sell their shares.
Answer: Which of the following are reasons for one company to gain
control over another with less than 100% ownership?
, ●● The consolidated entity's net income attributable to the non-
controlling interest.
The balance of the noncontrolling interest as of the beginning of the
period.
Dividends from the subsidiary attributable to the noncontrolling interest
Answer: As part of the consolidation process which of the following are
included in the calculation of the ending balance of the noncontrolling
interest?
●● Shareholders' equity section
Answer: The amount for the noncontrolling interest is reported in the
consolidated balance sheet in the
●● A deduction for 80% of subsidiary dividends declared since
acquisition.
80% of post-acquisition subsidiary earnings adjusted for excess
acquisition-date fair value amortizations.
Answer: For an 80% owned subsidiary accounted for under the equity
method, the parent includes in the Investment in Subsidiary account
balance
