TEST BANK FOR ADVANCED FINANCIAL ACCOUNTING 13TH EDITION BY THEODORE CHRISTENSEN ALL CHAPTERS COVERED 1 - 20 |COMPLETE GUIDE| A” GUIDE

,TEST BANK FOR
T T


AdvancedTFinancialTAccountingT13thTEditionTByTTheodoreTChristensen


ChapterT1 IntercorporateT AcquisitionsT andT InvestmentsT inT OtherT Entities

1) AssumingT noT impairmentT inT valueT priorT toT transfer,T assetsTtransferredT byTaT parentT companyT
toTanotherT entityT itT hasT createdT shouldT beT recordedT byTtheT newlyT createdT entityTatT theT assets':
A) costTtoT theT parentT company.
B) bookT valueT onTtheT parentT company'sT booksT atT theT dateT ofTtransfer.
C) fairT valueT atT theT dateT ofTtransfer.
D) fairTvalueTofTconsiderationTexchangedTbyTtheTnewlyTcreatedTentity.

Answer:T BTDiffi
culty:T1TEasy
Topic:TInternalTExpansion:TCreatingTaTBusinessTEntity;TValuationTofTBusinessTEntitiesTLearn
ingTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT
typesT ofT organizationalT structures,T andT theT typesT ofT acquisitions.;T 01T-
03TMakeT calculationsTandT prepareT journalT entriesT forT theT creationT ofTaT businessT entity.
Bloom's:
RememberTAACSB
:T ReflectiveTThinkingTAICPA:
FNT DecisionT Makin
g

2) GivenTtheTincreasedTdevelopmentTofTcomplexTbusinessTstructures,TwhichTofTtheTfollowingTr
egulatorsTisTresponsibleT forTtheTcontinuedTusefulnessTofTaccountingTreports?
A) SecuritiesT andT ExchangeT CommissionT (SEC)
B) PublicT CompanyT AccountingT OversightT BoardT (PCAOB)
C) FinancialT AccountingT StandardsT BoardT (FASB)
D) AllT ofTtheT otherT answersT areT correct

Answer:T DTDiffi
culty:T1TEasy
Topic: AnT IntroductionT toT ComplexT BusinessT Structures
LearningTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T the
T typesT ofT organizationalT structures,T andT theT typesT ofTacquisitions.

Bloom's:
RememberTAACSB
:T ReflectiveTThinkingTAICPA:
FNTReporting

3) ATbusinessTcombinationTinTwhichTtheTacquiredTcompany'sTassetsTandTliabilitiesTareTcombinedT
withTthoseTofTtheTacquiringT companyTintoTaT singleT entityTisTdefinedTas:
A) StockTacquisition
B) LeveragedTbuyout

,C) StatutoryTMerger
D) ReverseT statutoryT rollup

, Answer:T CTDiffi
culty:T1TEasy
Topic: OrganizationalT StructureT andT FinancialT Reporting
LearningTObjective: 01-
04TUnderstandTandTexplainTtheTdifferencesTbetweenTdifferentTformsTofTbusinessTcombinations.
Bloom's:
RememberTAACSB
:T ReflectiveTThinkingTAICPA:
FNT DecisionT Makin
g

4) InT whichT ofTtheT followingT situationsT doT accountingT standardsT notT requireT thatT theT financi
alTstatementsTofTtheT parentT andT subsidiaryTbeTconsolidated?
A) ATcorporationTcreatesTaTnewT100TpercentT ownedTsubsidiary
B) AT corporationT purchasesT 90T percentT ofTtheT votingT stockT ofT anotherT company
C) AT corporationT hasT bothT controlT andT majorityT ownershipT ofT anT unincorporatedT company
D) AT corporationT ownsT less-thanT aT controllingT interestT inT anT unincorporatedT company

Answer:T DTDiffi
culty:T1TEasy
Topic: OrganizationalT StructureT andT FinancialT Reporting
LearningTObjective: 01-
01TUnderstandTandTexplainTtheTreasonsTforTandTdifferentTmethodsTofTbusinessT expansion,T theT ty
pesT ofT organizationalT structures,T andT theT typesT ofTacquisitions.
Bloom's:
RememberTAACSB
:T ReflectiveTThinkingTAICPA:
FNT DecisionT Makin
g

DuringTitsTinception,TDevonTCompanyTpurchasedTlandTforT$100,000TandTaTbuildingTforT$180,00
0.TAfterTexactlyT3Tyears,TitTtransferredTtheseTassetsTandTcashTofT$50,000TtoTaTnewlyTcreatedTsubsidia
ry,TReganTCompany,TinTexchangeTforT15,000TsharesTofTRegan'sT$10TparTvalueTstock.TDevonTuse
sTstraight-
lineTdepreciation.TUsefulTlifeTforTtheTbuildingTisT30Tyears,TwithTzeroTresidualTvalue.TAnTapprais
alTrevealedTthatTtheTbuildingThasTaT fairT valueTofT$200,000.

5) BasedT onTtheT informationT provided,T atT theT timeT ofT theT transfer,T ReganT CompanyT shouldT record:
A) BuildingT atT $180,000T andT noT accumulatedT depreciation.
B) BuildingT atT $162,000T andT noT accumulatedT depreciation.
C) BuildingT atT $200,000T andT accumulatedT depreciationT ofT $24,000.
D) BuildingT atT $180,000T andT accumulatedT depreciationT ofT $18,000.

Answer:TTDTDifficult
y:T 2T Medium
Topic:
ValuationT ofT BusinessT Entities;T AccountingT forT InternalT Expansion:T CreatingT Busines
sTEntities
LearningTObjective: 01-
04TUnderstandTandTexplainTtheTdifferencesTbetweenTdifferentTformsTofTbusinessT combinations.;
T 01-03T MakeT calculationsT andT prepareT journalT entriesT forT theT creationT ofTaTbusiness Tentity.