R R
RRRRR
PREFACE1.RIntercorporateRAcquisitionsRandRInvestmentsRinROtherREntities
2.RReportingRIntercorporateRInvestmentsRandRConsolidationRofRWhollyROwnedRSubsidiariesRwithRNoRDifferential
3.RTheRReportingREntityRandRtheRConsolidationRofRLess-Than-Wholly-OwnedRSubsidiariesRwithRNoDifferential
4.RConsolidationRofRWhollyROwnedRSubsidiariesRAcquiredRatRMoreRThanRBookRValue
5.RConsolidationRofRLess-Than-Wholly-OwnedRSubsidiariesRAcquiredRatRMoreRThanRBookRValue
6.RIntercompanyRInventoryRTransactions
7.RIntercompanyRTransfersRofRServicesRandRNoncurrentRAssets
8.RIntercompanyRIndebtedness
9.RConsolidationROwnershipRIssues
10.RAdditionalRConsolidationRReportingRIssues
11.RMultinationalRAccounting:RForeignRCurrencyRTransactionsRandRFinancialRInstruments
12.RMultinationalRAccounting:RIssuesRinRFinancialRReportingRandRTranslationRofRForeignREntityRStatements
13.RSegmentRandRInterimRReporting
14.RSECRReporting
15.RPartnerships:RFormation,ROperation,RandRChangesRinRMembership
16.RPartnerships:RLiquidation
17.RGovernmentalREntities:RIntroductionRandRGeneralRFundRAccounting
18.RGovernmentalREntities:RSpecialRFundsRandRGovernmentwideRFinancialRStatements
19.RNot-for-ProfitREntities
20.RCorporationsRinRFinancialRDifficulty
ChapterR1 IntercorporateR AcquisitionsR andR InvestmentsR inR OtherR Entities
1) AssumingR noR impairmentR inR valueR priorR toR transfer,R assetsRtransferredR byRaR parentR company
R toRanotherR entityR itR hasR createdR shouldR beR recordedR byRtheR newlyR createdR entityRatR theR assets':
A) costRtoR theR parentR company.
B) bookR valueR onRtheR parentR company'sR booksRatR theR dateR ofRtransfer.
C) fairR valueR atR theR dateR ofRtransfer.
D) fairRvalueRofRconsiderationRexchangedRbyRtheRnewlyRcreatedRentity.
Answer:R BRDiffi
culty:R1REasy
Topic:RInternalRExpansion:RCreatingRaRBusinessREntity;RValuationRofRBusinessREntitiesRLear
ningRObjective: 01-
01RUnderstandRandRexplainRtheRreasonsRforRandRdifferentRmethodsRofRbusinessR expansion,R the
R typesR ofR organizationalR structures,R andR theR typesR ofR acquisitions.;R 01R-
03RMakeR calculationsRandR prepareRjournalRentriesR forRtheR creationR ofRaR businessR entity.
Bloom's:
RememberRAACSB
:R ReflectiveRThinkingRAICPA:
FNR DecisionR Makin
g
2) GivenRtheRincreasedRdevelopmentRofRcomplexRbusinessRstructures,RwhichRofRtheRfollowingR
regulatorsRisRresponsibleR forRtheRcontinuedRusefulnessRofRaccountingRreports?
A) SecuritiesR andR ExchangeR CommissionR (SEC)
,B) PublicR CompanyR AccountingR OversightR BoardR (PCAOB)
C) FinancialR AccountingR StandardsR BoardR (FASB)
D) AllR ofRtheR otherR answersR areR correct
Answer:R DRDiffi
culty:R1REasy
Topic: AnR IntroductionR toR ComplexR BusinessR Structures
LearningRObjective: 01-
01RUnderstandRandRexplainRtheRreasonsRforRandRdifferentRmethodsRofRbusinessR expansion,R th
eR typesR ofRorganizationalR structures,R andR theR typesR ofRacquisitions.
Bloom's:
RememberRAACSB
:R ReflectiveRThinkingRAICPA
: FNRReporting
3) ARbusinessRcombinationRinRwhichRtheRacquiredRcompany'sRassetsRandRliabilitiesRareRcombinedR
withRthoseRofRtheRacquiringR companyRintoRaR singleR entityRisRdefinedRas:
A) StockRacquisition
B) LeveragedRbuyout
C) StatutoryRMerger
D) ReverseR statutoryR rollup
, Answer:R CRDiffi
culty:R1REasy
Topic: OrganizationalR StructureR andR FinancialR Reporting
LearningRObjective: 01-
04RUnderstandRandRexplainRtheRdifferencesRbetweenRdifferentRformsRofRbusinessRcombinations
.
Bloom's:
RememberRAACSB
:R ReflectiveRThinkingRAICPA:
FNR DecisionR Makin
g
4) InR whichR ofRtheR followingR situationsR doR accountingR standardsR notR requireR thatR theR finan
cialRstatementsRofRtheRparentR andRsubsidiaryRbeRconsolidated?
A) ARcorporationRcreatesRaRnewR100RpercentR ownedRsubsidiary
B) AR corporationR purchasesR 90R percentR ofRtheR votingR stockR ofRanotherR company
C) AR corporationR hasR bothR controlR andR majorityR ownershipR ofRanR unincorporatedR company
D) AR corporationR ownsR less-thanR aR controllingR interestR inR anR unincorporatedR company
Answer:R DRDiffi
culty:R1REasy
Topic: OrganizationalR StructureR andR FinancialR Reporting
LearningRObjective: 01-
01RUnderstandRandRexplainRtheRreasonsRforRandRdifferentRmethodsRofRbusinessR expansion,R theR t
ypesR ofRorganizationalR structures,R andR theR typesR ofRacquisitions.
Bloom's:
RememberRAACSB
:R ReflectiveRThinkingRAICPA:
FNR DecisionR Makin
g
DuringRitsRinception,RDevonRCompanyRpurchasedRlandRforR$100,000RandRaRbuildingRforR$180,0
00.RAfterRexactlyR3Ryears,RitRtransferredRtheseRassetsRandRcashRofR$50,000RtoRaRnewlyRcreatedRsubsi
diary,RReganRCompany,RinRexchangeRforR15,000RsharesRofRRegan'sR$10RparRvalueRstock.RDevon
RusesRstraight-
lineRdepreciation.RUsefulRlifeRforRtheRbuildingRisR30Ryears,RwithRzeroRresidualRvalue.RAnRapprai
salRrevealedRthatRtheRbuildingRhasRaR fairR valueRofR$200,000.
5) BasedR onRtheR informationR provided,R atR theR timeR ofR theR transfer,R ReganR CompanyR shouldR record:
A) BuildingR atR $180,000R andR noR accumulatedR depreciation.
B) BuildingR atR $162,000R andR noR accumulatedR depreciation.
C) BuildingR atR $200,000R andR accumulatedR depreciationR ofR $24,000.
D) BuildingR atR $180,000R andR accumulatedR depreciationR ofR $18,000.
Answer:RRDRDifficult
y:R 2R Medium
Topic:
ValuationR ofR BusinessR Entities;R AccountingR forR InternalR Expansion:R CreatingR Busine
ssREntities
LearningRObjective: 01-
04RUnderstandRandRexplainRtheRdifferencesRbetweenRdifferentRformsRofRbusinessR combinations.;