ADVANCED ACCOUNTING 13TH EDITION EXAM CHAPTERS 1 THROUGH 3
QUESTIONS AND ANSWERS WITH SOLU, Exams of Advanced Accounting
Consolidation - ANSWERA business combination in which a new corporation
is formed to take over the assets and operations of two or more separate
business entities, with the previously separate entities being dissolved, is a/
an:
(a) Consolidation
(b) Merger
(c) Pooling of interests
(d) Acquisition
Charged against other paid-in capital of the combined entity - ANSWERIn a
business combination, the direct costs of registering and issuing equity
securities are:
(a) Added to the parent/ investor company's investment account
(b) Charged against other paid-in capital of the combined entity
(c) Deducted from income in the period of combination
(d) None of the above
Reported as a gain from a bargain purchase - ANSWERAn excess of the fair
value of net assets acquired in a business combination over the price paid is:
, (a) Reported as a gain from a bargain purchase
(b) Applied to a reduction of noncash assets before negative goodwill may be
reported
(c) Applied to reduce non-current assets other than marketable securities to
zero before negative goodwill may be reported
(d) Applied to reduce goodwill to zero before negative goodwill may be
reported
None of the Above - ANSWERCork Corporation acquires Dart Corporation in a
business combination. Which of the following would be excluded from the
process of assigning fair values to assets and liabilities for purposes of
recording the acquisition? (Assume Dart Corporation is dissolved.)
(a) Patents developed by Dart because the costs were expensed under GAAP
(b) Dart's mortgage payable because it is fully secured by land that has a
market value far in excess of the mortgage
(c) An asset or liability amount for over-or underfunding of Dart's defined-
benefit pension plan
(d) None of the above
Pop Corporation paid $100,000 cash for the net assets of Son Company,
which consisted of the following:
Current assets:
Plant and equipment:
Liabilities assumed:
Total of accounts above:
QUESTIONS AND ANSWERS WITH SOLU, Exams of Advanced Accounting
Consolidation - ANSWERA business combination in which a new corporation
is formed to take over the assets and operations of two or more separate
business entities, with the previously separate entities being dissolved, is a/
an:
(a) Consolidation
(b) Merger
(c) Pooling of interests
(d) Acquisition
Charged against other paid-in capital of the combined entity - ANSWERIn a
business combination, the direct costs of registering and issuing equity
securities are:
(a) Added to the parent/ investor company's investment account
(b) Charged against other paid-in capital of the combined entity
(c) Deducted from income in the period of combination
(d) None of the above
Reported as a gain from a bargain purchase - ANSWERAn excess of the fair
value of net assets acquired in a business combination over the price paid is:
, (a) Reported as a gain from a bargain purchase
(b) Applied to a reduction of noncash assets before negative goodwill may be
reported
(c) Applied to reduce non-current assets other than marketable securities to
zero before negative goodwill may be reported
(d) Applied to reduce goodwill to zero before negative goodwill may be
reported
None of the Above - ANSWERCork Corporation acquires Dart Corporation in a
business combination. Which of the following would be excluded from the
process of assigning fair values to assets and liabilities for purposes of
recording the acquisition? (Assume Dart Corporation is dissolved.)
(a) Patents developed by Dart because the costs were expensed under GAAP
(b) Dart's mortgage payable because it is fully secured by land that has a
market value far in excess of the mortgage
(c) An asset or liability amount for over-or underfunding of Dart's defined-
benefit pension plan
(d) None of the above
Pop Corporation paid $100,000 cash for the net assets of Son Company,
which consisted of the following:
Current assets:
Plant and equipment:
Liabilities assumed:
Total of accounts above:
