SOLUTIONS MANUAL for Advanced Financial Accounting, 13th Edition. By Theodore Christensen, David Cottrell and Cassy Budd _ Complete Download.

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Advanced Financial Accounting 13th Edition By Theodore Christensen AE AE AE AE AE AE AE




Chapter 1 Intercorporate Acquisitions and Investments in Other Entities
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1) Assuming no impairment in value prior to transfer, assets transferred by a parent company
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toanother entity it has created should be recorded by the newly created entity at the assets':
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A) cost to the parent company. AE A E A E A E




B) book value on the parent company's books at the date of transfer.
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C) fair value at the date of transfer.
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D) fair value of consideration exchanged by the newly created entity.
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Answer: B Diffic A E AE




ulty: 1 Easy AE AE




Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Learnin
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g Objective:
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01 Understand and explain the reasons for and different methods of business expansion, the ty
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pes of organizational structures, and the types of acquisitions.; 01 -
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03 Make calculations and prepare journal entries for the creation of a business entity.
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Bloom's:
Remember AACSB: AE




A Reflective Thinking AICPA:
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FN Decision Making AE A E




2) Given the increased development of complex business structures, which of the followingreg
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ulators is responsible for the continued usefulness of accounting reports?
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A) Securities and Exchange Commission (SEC) A E A E A E A E




B) Public Company Accounting Oversight Board (PCAOB) A E A E A E A E A E




C) Financial Accounting Standards Board (FASB) A E A E A E A E




D) All of the other answers are correct
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Answer: D Diffic A E AE




ulty: 1 Easy AE AE




Topic: An Introduction to Complex Business Structures A E A E A E A E A E




Learning Objective: 01- AE




01 Understand and explain the reasons for and different methods ofbusiness expansion, the ty
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pes of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB AE




: Reflective Thinking AICPA:
A E AE E
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FN Reporting AE




3) A business combination in which the acquired company's assets and liabilities are combinedwit
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h those of the acquiring company into a single entity is defined as:
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A) Stock acquisition AE




B) Leveraged buyout AE




C) Statutory Merger AE

,D) Reverse statutory rollup
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, Answer: C Diffic A E AE




ulty: 1 Easy AE AE




Topic: Organizational Structure and Financial Reporting A E A E A E A E




Learning Objective: 01- AE




04 Understand and explain the differences between different forms ofbusiness combinations.
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Bloom's:
Remember AACSB: AE




A Reflective Thinking AICPA:
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FN Decision Making AE A E




4) In which of the following situations do accounting standards not require that the financ
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ialstatements of the parent and subsidiary be consolidated?
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A) A corporation creates a new 100 percent owned subsidiary
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B) A corporation purchases 90 percent of the voting stock of another company
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C) A corporation has both control and majority ownership of an unincorporated company
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D) A corporation owns less-than a controlling interest in an unincorporated company
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Answer: D Diffic A E AE




ulty: 1 Easy AE AE




Topic: Organizational Structure and Financial Reporting A E A E A E A E




Learning Objective: 01- AE




01 Understand and explain the reasons for and different methods ofbusiness expansion, the type
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s of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB: AE




A Reflective Thinking AICPA:
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FN Decision Making AE A E




During its inception, Devon Company purchased land for $100,000 and a building for $180,000. A
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fter exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary,Reg
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an Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses straight-
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line depreciation. Useful life for the building is 30 years, with zero residual value. An appraisal r
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evealed that the building has a fair value of $200,000.
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5) Based on the information provided, at the time of the transfer, Regan Company should record:
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A) Building at $180,000 and no accumulated depreciation. A E A E A E A E A E A E




B) Building at $162,000 and no accumulated depreciation. A E A E A E A E A E A E




C) Building at $200,000 and accumulated depreciation of $24,000. A E A E A E A E A E A E A E




D) Building at $180,000 and accumulated depreciation of $18,000. A E A E A E A E A E A E A E




Answer: D Difficult A EA E AE




y: 2 Medium A E A E




Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Busine A E A E A E A E A E A E A E A E A E




ss Entities AE




Learning Objective: 01- AE




04 Understand and explain the differences between different forms of business combinations.; 0
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1-03 Make calculations and prepare journal entries for the creation of a business entity.
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Bloom's:
Understand AACSB AE




: Analytical Thinking AICPA:
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A