,ACCESS Test Bank for Advanced Financial Accounting 13th EditionChris
m m m m m m m m m
tensen
Advanced Financial Accounting Edition 13 Christensen
m m m m m
CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
m m m m m m m m m m
MULTIPLEmCHOICEm-
mChoosemthemonemalternativemthatmbestmcompletesmthemstatementmorm answersmthemquestion
.
1) Assumingmnomimpairmentminmvaluempriormtomtransfer,massetsmtransferredmbymamparentmcompany
mtomanothermentitymitmhasmcreatedmshouldmbemrecordedmbymthemnewlymcreatedmentitymatmthemasset
s':
A) costmtomthemparentmcompany.
B) bookmvaluemonmthemparentmcompany'smbooksmatmthemdatemofmtransfer.
C) fairmvaluematmthemdatemofmtransfer.
D) fairmvaluemofmconsiderationmexchangedmbymthemnewlymcreatedmentity.
2) Givenmthemincreasedmdevelopmentmofmcomplexmbusinessmstructures,mwhichmofmthemfollowi
ngmregulatorsmismresponsiblemformthemcontinuedmusefulnessmofmaccountingmreports?
A) SecuritiesmandmExchangemCommissionm(SEC)
B) PublicmCompanymAccountingmOversightmBoardm(PCAOB)
C) FinancialmAccountingmStandardsmBoardm(FASB)
D) Allmofmthemothermanswersmaremcorrect
3) Ambusinessmcombinationminmwhichmthemacquiredmcompany'smassetsmandmliabilitiesmaremcombin
edmwithmthosemofmthemacquiringmcompanymintomamsinglementitymismdefinedmas:
A) Stockmacquisition
B) Leveragedmbuyout
C) Statutorymmerger
D) Reversemstatutorymrollup
4) Inmwhichmofmthemfollowingmsituationsmdomaccountingmstandardsmnotmrequiremthatmthemfinanc
ialmstatementsmofmthemparentmandmsubsidiarymbemconsolidated?
A) Amcorporationmcreatesmamnewm100mpercentmownedmsubsidiary
B) Amcorporationmpurchasesm90mpercentmofmthemvotingmstockmofmanothermcompany
C) Amcorporationmhasmbothmcontrolmandmmajoritymownershipmofmanmunincorporat
edmcompany
D) Amcorporationmownsmless-thanmamcontrollingminterestminmanmunincorporatedmcompany
Versionm 1
1 mynursytest.store
,ACCESS Test Bank for Advanced Financial Accounting 13th EditionChris
m m m m m m m m m
tensen
Advanced Financial Accounting Edition 13 Christensen
m m m m m
5) Whichmofmthemfollowingmsituationsmbestmdescribesmambusinessmcombinationmtombemaccountedm
formasmamstatutorymmerger?
A) Bothmcompaniesminmamcombinationmcontinuemtomoperatemasmseparate,mbutmrelated,mle
galmentities.
B) Onlymonemofmthemcombiningmcompaniesmsurvivesmandmthemothermlosesmitsmsepar
atemidentity.
C) Twomcompaniesmcombinemtomformmamnewmthirdmcompany,mandmthemoriginalmt
womcompaniesmaremdissolved.
D) Onemcompanymtransfersmassetsmtomanothermcompanymitmhasmcreated.
6) Amstatutorymconsolidationmismamtypemofmbusinessmcombinationminmwhich:
A) onemofmthemcombiningmcompaniesmsurvivesmandmthemothermlosesmitsmseparatemidentity.
B) onemcompanymacquiresmthemvotingmsharesmofmthemothermcompanymandmthemtwomcompan
iesmcontinuemtomoperatemasmseparatemlegalmentities.
C) twompubliclymtradedmcompaniesmagreemtomsharemamboardmofmdirectors.
D) eachmofmthemcombiningmcompaniesmismdissolvedmandmthemnetmassetsmofmbothmcompan
iesmaremtransferredmtomamnewlymcreatedmcorporation.
7) BurroughmCorporationmpaidm$80,000mtomacquiremallmofmHelyarmCompany’smnetmassets.mHelyar
mreportedmassetsmwithmambookmvaluemofm$60,000mandmfairmvaluemofm$98,000mandmliabilitiesmwit
hmambookmvaluemandmfairmvaluemofm$23,000monmthemdatemofmcombination.mBurroughmalsompaidm
$3,000mtomamsearchmfirmmformamfinder’smfeemrelatedmtomthemacquisition.mWhatmamountmwillmbemr
ecordedmasmgoodwillmbymBurroughmCorporationmwhilemrecordingmitsminvestmentminmHelyar?
A) $0
B)mmm $5,000
C)mmm $8,000
D)m $13,000
8) SimmonsmCorporationmpaidm$170,000mtomacquiremallmofmBushmCompany'smnetmassets.mBushmre
portedmassetsmwithmambookmvaluemofm$189,000mandmamfairmvaluemofm$206,000mandmliabilitiesmw
ithmambookmvaluemandmfairmvaluemofm$48,000monmthemdatemofmthemcombination.mSimmonsmalsom
paidm$8,000mtomamsearchmfirmmformamfinder'smfeemrelatedmtomthemacquisition.mWhatmamountmwill
mbemrecordedmasmgoodwillmbymSimmonsmCorporationmwhenmrecordingmitsminvestmentminmBush?
A)mmm $29,000
B)mmm $20,000
C)mmm $12,000
D)mmm $10,000
Versionm 2
1 mynursytest.store
, ACCESS Test Bank for Advanced Financial Accounting 13th EditionChris
m m m m m m m m m
tensen
Advanced Financial Accounting Edition 13 Christensen
m m m m m
9) ThemfairmvaluemofmnetmidentifiablemassetsmofmamreportingmunitmofmXmCompanymism$300,000.mO
nmXmCompany'smbooks,mthemcarryingmvaluemofmthismreportingmunit'smnetmassetsmism$350,000,mw
hichmincludesm$60,000mofmgoodwill.mIfmthemfairmvaluemofmthemreportingmunitmasmamwholemism$3
35,000,mwhatmamountmofmgoodwillmimpairmentmwillmbemrecognizedmformthismunit?
A) $0
B)mmm $15,000
C)mmm $25,000
D)mmm $35,000
10) ThemfairmvaluemofmnetmidentifiablemassetsmofmamreportingmunitmofmYmCompanymism$270,000.mThe
mcarryingmvaluemofmthemreportingmunit'smnetmassetsmonmYmCompany'smbooksmism$320,000,minclu
ding
$50,000mofmgoodwillmbeforemanymimpairment.mIfmthemreportedmgoodwillmimpairmentmformthemu
nitmism$10,000,mwhatmwouldmbemthemfairmvaluemofmthementiremreportingmunit?
A)mmm $320,000
B)mmm $310,000
C)mmm $270,000
D)mmm $290,000
11) Whichmofmthemfollowingmobservationsmism(are)mconsistentmwithmthemacquisitionmmethod
mofmaccountingmformbusinessmcombinations?
1. Expensesmrelatedmtomthembusinessmcombinationmaremexpensed.
2. Stockmissuemcostsmaremtreatedmasmamreductionminmthemissuemprice.
3. Allmmergermandmstockmissuemcostsmaremexpensed.
4. Nomgoodwillmismevermrecorded.
A) III
B) IV
C) ImandmII
D) I,mII,mandmIV
12) Whichmofmthemfollowingmobservationsmrefersmtomthemtermmdifferential?
A) Excessmofmconsiderationmexchangedmovermfairmvaluemofmnetmidentifiablemassets.
B) Excessmofmfairmvaluemovermbookmvaluemofmnetmidentifiablemassets.
C) Excessmofmconsiderationmexchangedmovermbookmvaluemofmnetmidentifiablemassets.
D) Excessmofmfairmvaluemovermhistoricalmcostmofmnetmidentifiablemassets.
Versionm 3
1 mynursytest.store
m m m m m m m m m
tensen
Advanced Financial Accounting Edition 13 Christensen
m m m m m
CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
m m m m m m m m m m
MULTIPLEmCHOICEm-
mChoosemthemonemalternativemthatmbestmcompletesmthemstatementmorm answersmthemquestion
.
1) Assumingmnomimpairmentminmvaluempriormtomtransfer,massetsmtransferredmbymamparentmcompany
mtomanothermentitymitmhasmcreatedmshouldmbemrecordedmbymthemnewlymcreatedmentitymatmthemasset
s':
A) costmtomthemparentmcompany.
B) bookmvaluemonmthemparentmcompany'smbooksmatmthemdatemofmtransfer.
C) fairmvaluematmthemdatemofmtransfer.
D) fairmvaluemofmconsiderationmexchangedmbymthemnewlymcreatedmentity.
2) Givenmthemincreasedmdevelopmentmofmcomplexmbusinessmstructures,mwhichmofmthemfollowi
ngmregulatorsmismresponsiblemformthemcontinuedmusefulnessmofmaccountingmreports?
A) SecuritiesmandmExchangemCommissionm(SEC)
B) PublicmCompanymAccountingmOversightmBoardm(PCAOB)
C) FinancialmAccountingmStandardsmBoardm(FASB)
D) Allmofmthemothermanswersmaremcorrect
3) Ambusinessmcombinationminmwhichmthemacquiredmcompany'smassetsmandmliabilitiesmaremcombin
edmwithmthosemofmthemacquiringmcompanymintomamsinglementitymismdefinedmas:
A) Stockmacquisition
B) Leveragedmbuyout
C) Statutorymmerger
D) Reversemstatutorymrollup
4) Inmwhichmofmthemfollowingmsituationsmdomaccountingmstandardsmnotmrequiremthatmthemfinanc
ialmstatementsmofmthemparentmandmsubsidiarymbemconsolidated?
A) Amcorporationmcreatesmamnewm100mpercentmownedmsubsidiary
B) Amcorporationmpurchasesm90mpercentmofmthemvotingmstockmofmanothermcompany
C) Amcorporationmhasmbothmcontrolmandmmajoritymownershipmofmanmunincorporat
edmcompany
D) Amcorporationmownsmless-thanmamcontrollingminterestminmanmunincorporatedmcompany
Versionm 1
1 mynursytest.store
,ACCESS Test Bank for Advanced Financial Accounting 13th EditionChris
m m m m m m m m m
tensen
Advanced Financial Accounting Edition 13 Christensen
m m m m m
5) Whichmofmthemfollowingmsituationsmbestmdescribesmambusinessmcombinationmtombemaccountedm
formasmamstatutorymmerger?
A) Bothmcompaniesminmamcombinationmcontinuemtomoperatemasmseparate,mbutmrelated,mle
galmentities.
B) Onlymonemofmthemcombiningmcompaniesmsurvivesmandmthemothermlosesmitsmsepar
atemidentity.
C) Twomcompaniesmcombinemtomformmamnewmthirdmcompany,mandmthemoriginalmt
womcompaniesmaremdissolved.
D) Onemcompanymtransfersmassetsmtomanothermcompanymitmhasmcreated.
6) Amstatutorymconsolidationmismamtypemofmbusinessmcombinationminmwhich:
A) onemofmthemcombiningmcompaniesmsurvivesmandmthemothermlosesmitsmseparatemidentity.
B) onemcompanymacquiresmthemvotingmsharesmofmthemothermcompanymandmthemtwomcompan
iesmcontinuemtomoperatemasmseparatemlegalmentities.
C) twompubliclymtradedmcompaniesmagreemtomsharemamboardmofmdirectors.
D) eachmofmthemcombiningmcompaniesmismdissolvedmandmthemnetmassetsmofmbothmcompan
iesmaremtransferredmtomamnewlymcreatedmcorporation.
7) BurroughmCorporationmpaidm$80,000mtomacquiremallmofmHelyarmCompany’smnetmassets.mHelyar
mreportedmassetsmwithmambookmvaluemofm$60,000mandmfairmvaluemofm$98,000mandmliabilitiesmwit
hmambookmvaluemandmfairmvaluemofm$23,000monmthemdatemofmcombination.mBurroughmalsompaidm
$3,000mtomamsearchmfirmmformamfinder’smfeemrelatedmtomthemacquisition.mWhatmamountmwillmbemr
ecordedmasmgoodwillmbymBurroughmCorporationmwhilemrecordingmitsminvestmentminmHelyar?
A) $0
B)mmm $5,000
C)mmm $8,000
D)m $13,000
8) SimmonsmCorporationmpaidm$170,000mtomacquiremallmofmBushmCompany'smnetmassets.mBushmre
portedmassetsmwithmambookmvaluemofm$189,000mandmamfairmvaluemofm$206,000mandmliabilitiesmw
ithmambookmvaluemandmfairmvaluemofm$48,000monmthemdatemofmthemcombination.mSimmonsmalsom
paidm$8,000mtomamsearchmfirmmformamfinder'smfeemrelatedmtomthemacquisition.mWhatmamountmwill
mbemrecordedmasmgoodwillmbymSimmonsmCorporationmwhenmrecordingmitsminvestmentminmBush?
A)mmm $29,000
B)mmm $20,000
C)mmm $12,000
D)mmm $10,000
Versionm 2
1 mynursytest.store
, ACCESS Test Bank for Advanced Financial Accounting 13th EditionChris
m m m m m m m m m
tensen
Advanced Financial Accounting Edition 13 Christensen
m m m m m
9) ThemfairmvaluemofmnetmidentifiablemassetsmofmamreportingmunitmofmXmCompanymism$300,000.mO
nmXmCompany'smbooks,mthemcarryingmvaluemofmthismreportingmunit'smnetmassetsmism$350,000,mw
hichmincludesm$60,000mofmgoodwill.mIfmthemfairmvaluemofmthemreportingmunitmasmamwholemism$3
35,000,mwhatmamountmofmgoodwillmimpairmentmwillmbemrecognizedmformthismunit?
A) $0
B)mmm $15,000
C)mmm $25,000
D)mmm $35,000
10) ThemfairmvaluemofmnetmidentifiablemassetsmofmamreportingmunitmofmYmCompanymism$270,000.mThe
mcarryingmvaluemofmthemreportingmunit'smnetmassetsmonmYmCompany'smbooksmism$320,000,minclu
ding
$50,000mofmgoodwillmbeforemanymimpairment.mIfmthemreportedmgoodwillmimpairmentmformthemu
nitmism$10,000,mwhatmwouldmbemthemfairmvaluemofmthementiremreportingmunit?
A)mmm $320,000
B)mmm $310,000
C)mmm $270,000
D)mmm $290,000
11) Whichmofmthemfollowingmobservationsmism(are)mconsistentmwithmthemacquisitionmmethod
mofmaccountingmformbusinessmcombinations?
1. Expensesmrelatedmtomthembusinessmcombinationmaremexpensed.
2. Stockmissuemcostsmaremtreatedmasmamreductionminmthemissuemprice.
3. Allmmergermandmstockmissuemcostsmaremexpensed.
4. Nomgoodwillmismevermrecorded.
A) III
B) IV
C) ImandmII
D) I,mII,mandmIV
12) Whichmofmthemfollowingmobservationsmrefersmtomthemtermmdifferential?
A) Excessmofmconsiderationmexchangedmovermfairmvaluemofmnetmidentifiablemassets.
B) Excessmofmfairmvaluemovermbookmvaluemofmnetmidentifiablemassets.
C) Excessmofmconsiderationmexchangedmovermbookmvaluemofmnetmidentifiablemassets.
D) Excessmofmfairmvaluemovermhistoricalmcostmofmnetmidentifiablemassets.
Versionm 3
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