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

Test Bank for Advanced Financial Accounting
13th Edition
By Theodore Christensen

,TEST BANK FOR J U J U




AdvancedFinancialAccounting13th Edition ByTheodoreChristensen JU JU JU JU JU JU JU




Chapter1 U
J Intercorporate Acquisitions and Investments in Other Entities J U J U J U J U J U J U




1) Assuming no impairment in value prior to transfer, assets transferred by a parent company toan J U J U J U J U J U J U J U J U JU J U JU J U J U JU JU




other 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. JU J U J U J U




B) book value on the parent company's books at the date of transfer. J U J U JU J U J U J U J U J U J U J U JU




C) fair value at the date of transfer. J U J U J U J U J U JU




D) fair valueof consideration exchanged bythe newlycreated entity.
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Answer: B Diffic J U JU




ulty:1Easy JU JU




Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Learning Ob
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jective: 01-
01 Understand and explain the reasons for and different methods of business expansion, the types o
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f 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: JU




J ReflectiveThinkingAICPA:
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FN Decision Making J U J U




2) Given the increased development of complex business structures, which of the followingregulat
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ors isresponsible for the continued usefulness ofaccounting reports?
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A) Securities and Exchange Commission (SEC) J U J U J U J U




B) Public Company Accounting Oversight Board (PCAOB) J U J U J U J U J U




C) Financial Accounting Standards Board (FASB) J U J U J U J U




D) All of the other answers are correct J U JU J U J U J U J U




Answer: D Diffic J U JU




ulty:1Easy JU JU




Topic: An Introduction to Complex Business Structures J U J U J U J U J U




Learning Objective: 01- JU




01 Understand and explain thereasons for and different methods ofbusiness expansion, the types o
JU JU JU JU JU JU JU JU JU JU JU J U J U J U J U




f organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB: JU




J ReflectiveThinkingAICPA:
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FN Reporting JU




3) A business combination in which the acquired company's assets and liabilities are combinedwithth
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ose ofthe acquiring company into a single entity is defined as:
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A) Stock acquisition JU




B) Leveragedbuyout JU




C) StatutoryMerger JU

,D) Reverse statutory rollup
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, Answer: C Diffic J U JU




ulty:1Easy JU JU




Topic: Organizational Structure and Financial Reporting J U J U J U J U




Learning Objective: 01- JU




04Understand and explainthe differences between different forms ofbusiness combinations.
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Bloom's:
Remember AACSB: JU




JReflectiveThinkingAICPA:
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FN Decision Making J U J U




4) In which of the following situations do accounting standards not require that the financialst
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atements ofthe parent and subsidiary be consolidated? JU JU JU J U JU JU JU




A) Acorporationcreatesa new100 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 J U JU




ulty:1Easy JU JU




Topic: Organizational Structure and Financial Reporting J U J U J U J U




Learning Objective: 01- JU




01 Understand and explain the reasons for and different methods ofbusiness expansion, the types of
JU JU JU JU JU JU JU JU JU JU JU J U J U J U J U JU




organizational structures, and the types of acquisitions. J U J U J U J U J U JU




Bloom's:
Remember AACSB: JU




JReflectiveThinkingAICPA:
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FN Decision Making J U J U




During its inception, Devon Company purchased land for $100,000 anda building for $180,000. After e
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xactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary,Regan Compa
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ny, 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 reveal
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ed 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. J U J U J U J U J U J U




B) Building at $162,000 and no accumulated depreciation. J U J U J U J U J U J U




C) Building at $200,000 and accumulated depreciation of $24,000. J U J U J U J U J U J U J U




D) Building at $180,000 and accumulated depreciation of $18,000. J U J U J U J U J U J U J U




Answer: D Difficulty: J UJU JU J




U2 Medium J U




Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Business J U J U J U J U J U J U J U J U J U JU




Entities
Learning Objective: 01- JU




04 Understand and explain the differences between different forms of business combinations.; 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:
Understand AACSB JU




: AnalyticalThinkingAICPA:
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