SOLUTIONS TEST BANK FOR :
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Advanced Financial Accounting 13th Edition By The
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odore Christensen
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PDF download …….
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,Chapter 1 Intercorporate Acquisitions and Investments in Other Entities
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1) Assuming no impairment in value prior to transfer, assets transferred by a parent company to
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another 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.
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B) book value on the parent company's books at the date of transfer.
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C) fair value at the date of transfer.
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D) fair value of consideration exchanged by the newly created entity.
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Answer: B Difficul n k nk
ty: 1 Easy
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Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Learni
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ng Objective:
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01 Understand and explain the reasons for and different methods of business expansion, the ty
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pes of 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 n k
:
Reflective Thinking nk nk nk
AICPA: FN Decision Making nk nk
2) Given the increased development of complex business structures, which of the following
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regulators is responsible for the continued usefulness of accounting reports?
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A) Securities and Exchange Commission (SEC) nk nk nk nk
B) Public Company Accounting Oversight Board (PCAOB)
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C) Financial Accounting Standards Board (FASB) nk nk nk nk
D) All of the other answers are correct
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Answer: D Difficul n k nk
ty: 1 Easy
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Topic: An Introduction to Complex Business Structuresnk nk nk nk nk
Learning Objective: 01- nk
01 Understand and explain the reasons for and different methods of business expansion, the t
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ypes of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Reporting nk
3) A business combination in which the acquired company's assets and liabilities are combined
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with those of the acquiring company into a single entity is defined as:
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A) Stock acquisition nk
B) Leveraged buyout nk
C) Statutory Merger nk
D) Reverse statutory rollup nk nk
,Answer: C Difficul n k nk
ty: 1 Easy
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Topic: Organizational Structure and Financial Reporting nk nk nk nk
Learning Objective: 01- nk
04 Understand and explain the differences between different forms of business combinations.
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Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Decision Making nk nk
4) In which of the following situations do accounting standards not require that the financial
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statements of the parent and subsidiary be consolidated?
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A) A corporation creates a new 100 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 Difficul n k nk
ty: 1 Easy
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Topic: Organizational Structure and Financial Reporting nk nk nk nk
Learning Objective: 01- nk
01 Understand and explain the reasons for and different methods of business expansion, the t
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ypes of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Decision Making nk nk
During its inception, Devon Company purchased land for $100,000 and a building for $180,000.
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After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary,
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Regan Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses strai
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ght-
line depreciation. Useful life for the building is 30 years, with zero residual value. An appraisal r
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evealed 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. nk nk nk nk nk nk
B) Building at $162,000 and no accumulated depreciation.nk nk nk nk nk nk
C) Building at $200,000 and accumulated depreciation of $24,000.
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D) Building at $180,000 and accumulated depreciation of $18,000.
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Answer: D Difficul n k nk
ty: 2 Medium
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Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Businessnk nk nk nk nk nk nk nk nk nk
Entities
Learning Objective: 01- nk
04 Understand and explain the differences between different forms of business combinations.; 0
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1-03 Make calculations and prepare journal entries for the creation of a business entity.
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, Bloom's:
Understand AACSB:
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Analytical Thinking
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AICPA: FN Measurement
nk
nk nk nk nk
Advanced Financial Accounting 13th Edition By The
nk nk nk nk nk nknk
odore Christensen
nk
PDF download …….
nk nk
,Chapter 1 Intercorporate Acquisitions and Investments in Other Entities
nk nk nk nk nk nk nk
1) Assuming no impairment in value prior to transfer, assets transferred by a parent company to
nk nk nk nk nk nk nk nk nk nk nk nk nk nk nk
another 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.
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B) book value on the parent company's books at the date of transfer.
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C) fair value at the date of transfer.
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D) fair value of consideration exchanged by the newly created entity.
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Answer: B Difficul n k nk
ty: 1 Easy
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Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Learni
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ng Objective:
nk 01-
01 Understand and explain the reasons for and different methods of business expansion, the ty
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pes of 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.
nk nk nk nk nk nk nk nk nk nk nk nk nk
Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Decision Making nk nk
2) Given the increased development of complex business structures, which of the following
nk nk nk nk nk nk nk nk nk nk nk nk
regulators is responsible for the continued usefulness of accounting reports?
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A) Securities and Exchange Commission (SEC) nk nk nk nk
B) Public Company Accounting Oversight Board (PCAOB)
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C) Financial Accounting Standards Board (FASB) nk nk nk nk
D) All of the other answers are correct
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Answer: D Difficul n k nk
ty: 1 Easy
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Topic: An Introduction to Complex Business Structuresnk nk nk nk nk
Learning Objective: 01- nk
01 Understand and explain the reasons for and different methods of business expansion, the t
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ypes of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Reporting nk
3) A business combination in which the acquired company's assets and liabilities are combined
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with those of the acquiring company into a single entity is defined as:
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A) Stock acquisition nk
B) Leveraged buyout nk
C) Statutory Merger nk
D) Reverse statutory rollup nk nk
,Answer: C Difficul n k nk
ty: 1 Easy
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Topic: Organizational Structure and Financial Reporting nk nk nk nk
Learning Objective: 01- nk
04 Understand and explain the differences between different forms of business combinations.
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Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Decision Making nk nk
4) In which of the following situations do accounting standards not require that the financial
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statements of the parent and subsidiary be consolidated?
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A) A corporation creates a new 100 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 Difficul n k nk
ty: 1 Easy
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Topic: Organizational Structure and Financial Reporting nk nk nk nk
Learning Objective: 01- nk
01 Understand and explain the reasons for and different methods of business expansion, the t
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ypes of organizational structures, and the types of acquisitions.
nk nk nk nk nk nk nk nk
Bloom's:
Remember AACSB n k
:
Reflective Thinking nk nk nk
AICPA: FN Decision Making nk nk
During its inception, Devon Company purchased land for $100,000 and a building for $180,000.
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After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary,
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Regan Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses strai
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ght-
line depreciation. Useful life for the building is 30 years, with zero residual value. An appraisal r
nk nk nk nk nk nk nk nk nk nk nk nk nk nk nk nk
evealed 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. nk nk nk nk nk nk
B) Building at $162,000 and no accumulated depreciation.nk nk nk nk nk nk
C) Building at $200,000 and accumulated depreciation of $24,000.
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D) Building at $180,000 and accumulated depreciation of $18,000.
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Answer: D Difficul n k nk
ty: 2 Medium
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Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Businessnk nk nk nk nk nk nk nk nk nk
Entities
Learning Objective: 01- nk
04 Understand and explain the differences between different forms of business combinations.; 0
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1-03 Make calculations and prepare journal entries for the creation of a business entity.
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, Bloom's:
Understand AACSB:
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Analytical Thinking
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AICPA: FN Measurement
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