Test Bank For Advanced Financial Accounting 13th Edition By Theodore Christensen, Complete Chapters 1 - 20, Verified Newest Version

,Chapter hg1 Intercorporate hgAcquisitions hgand hgInvestments hgin hgOther hgEntities

1) Assuming hgno hgimpairment hgin hgvalue hgprior hgto hgtransfer, hgassets hgtransferred hgby hga hgparent
hgcompany hgtoh another hgentity hgit hghas hgcreated hgshould hgbe hgrecorded hgby hgthe hgnewly hgcreated
g

hgentity hgat hgthe hgassets':

A) cost hgto hgthe hgparent hgcompany.
B) book hgvalue hgon hgthe hgparent hgcompany's hgbooks hgat hgthe hgdate hgof hgtransfer.
C) fair hgvalue hgat hgthe hgdate hgof hgtransfer.
D) fair hgvalue hgof hgconsideration hgexchanged hgby hgthe hgnewly hgcreated hgentity.

Answer: h g B
hgDifficulty: hg1

hgEasy

Topic: h g Internal hgExpansion: hgCreating hga hgBusiness hgEntity; hgValuation hgof hgBusiness hgEntities
hgLearning hgObjective: 01-01 hgUnderstand hgand hgexplain hgthe hgreasons hgfor hgand hgdifferent

hgmethods hgof hgbusiness hgexpansion, hgthe hgtypes hgof hgorganizational hgstructures, hgand hgthe hgtypes

hgof hgacquisitions.; hg01-03h
Make hgcalculations hgand hgprepare hgjournal hgentries hgfor hgthe hgcreation hgof
g

hga hgbusiness hgentity.

Bloom's: Remember
hgAACSB: Reflective

hgThinkinghgAICPA: FN

hgDecision hgMaking




2) Given hgthe hgincreased hgdevelopment hgof hgcomplex hgbusiness hgstructures, hgwhich hgof hgthe
hgfollowinghgregulators hgis hgresponsible hg for hgthe hgcontinued hgusefulness hgof hgaccounting

hgreports?

A) Securities hgand hgExchange hgCommission hg(SEC)
B) Public hgCompany hgAccounting hgOversight hgBoard hg(PCAOB)
C) Financial hgAccounting hgStandards hgBoard hg(FASB)
D) All hgof hgthe hgother hganswers hgare hgcorrect

Answer: h g D
hgDifficulty: hg1

hgEasy

Topic: An hgIntroduction hgto hgComplex hgBusiness hgStructures
Learning hgObjective: 01-01 hgUnderstand hgand hgexplain hgthe hgreasons hgfor hgand hgdifferent
hgmethods hgofh business hgexpansion, hgthe hgtypes hgof hgorganizational hgstructures, hgand hgthe hgtypes
g

hgof hgacquisitions.

Bloom's: Remember
hgAACSB: Reflective

hgThinkinghgAICPA: FN

hgReporting




3) A hgbusiness hgcombination hgin hgwhich hgthe hgacquired hgcompany's hgassets hgand hgliabilities hgare
hgcombinedhgwith hgthose hgof hgthe hgacquiring hgcompany hginto hg a hgsingle hgentity hgis hgdefined hgas:

A) Stock hgacquisition
B) Leveraged hgbuyout
C) Statutory hgMerger
D) Reverse hgstatutory hgrollup

,Answer: h g C
hgDifficulty: hg1

hgEasy

Topic: Organizational hgStructure hgand hgFinancial hgReporting
Learning hgObjective: 01-04 hgUnderstand hgand hgexplain hgthe hgdifferences hgbetween hgdifferent
hgforms hgofhgbusiness hgcombinations.

Bloom's: Remember
hgAACSB: Reflective

hgThinkinghgAICPA: FN

hgDecision hgMaking




4) In hgwhich hgof hgthe hgfollowing hgsituations hgdo hgaccounting hgstandards hgnot hgrequire hgthat hgthe
hgfinancialhgstatements hgof hgthe hgparent hg and hgsubsidiary hgbe hgconsolidated?

A) A hgcorporation hgcreates hga hgnew hg100 hgpercent hgowned hgsubsidiary
B) A hgcorporation hgpurchases hg90 hgpercent hgof hgthe hgvoting hgstock hgof hganother hgcompany
C) A hgcorporation hghas hgboth hgcontrol hgand h g majority hgownership hgof hgan hgunincorporated hgcompany
D) A hgcorporation hgowns hgless-than hga hgcontrolling hginterest hgin hgan hgunincorporated hgcompany

Answer: h g D
hgDifficulty: hg1

hgEasy

Topic: Organizational hgStructure hgand hgFinancial hgReporting
Learning hgObjective: 01-01 hgUnderstand hgand hgexplain hgthe hgreasons hgfor hgand hgdifferent
hg methods hgofhbusiness hgexpansion, hgthe hgtypes hgof hgorganizational hgstructures, hgand hgthe hgtypes
g

hgof hgacquisitions.

Bloom's: Remember
hgAACSB: Reflective

hgThinkinghgAICPA: FN

hgDecision hgMaking




During hgits hginception, hgDevon hgCompany hgpurchased hgland hgfor hg$100,000 hgand hga hgbuilding hgfor
hg$180,000. hgAfter hgexactly hg3 hgyears, hgit hgtransferred hgthese hgassets hgand hgcash hgof hg$50,000 hgto hga

hgnewly hgcreated hgsubsidiary, h
Regan hgCompany, hgin hgexchange hgfor hg15,000 hgshares hgof hgRegan's hg$10
g

hgpar hgvalue hgstock. hgDevon hguses hgstraight-line hgdepreciation. hgUseful hglife hgfor hgthe hgbuilding hgis hg30

hgyears, hgwith hgzero hgresidual hgvalue. hgAn hgappraisal hgrevealed hgthat hgthe hgbuilding hg has hga hgfair hg value

hgof hg$200,000.




5) Based hgon hgthe hginformation hgprovided, hgat hgthe hgtime hgof hgthe hgtransfer, hgRegan hgCompany hgshould
h g record:

A) Building hgat hg$180,000 hgand hgno hgaccumulated hgdepreciation.
B) Building hgat hg$162,000 hgand hgno hgaccumulated hgdepreciation.
C) Building hgat hg$200,000 hgand hgaccumulated hgdepreciation hgof hg$24,000.
D) Building hgat hg$180,000 hgand hgaccumulated hgdepreciation hgof hg$18,000.

Answer: h g D
hgDifficulty: hg2

hgMedium

Topic: Valuation hgof hgBusiness hgEntities; hgAccounting hgfor hgInternal hgExpansion: hgCreating
hgBusinesshgEntities

Learning hgObjective: 01-04 hgUnderstand hgand hgexplain hgthe hgdifferences hgbetween hgdifferent
hgforms hgof hgbusiness hgcombinations.; hg01-03 hgMake hgcalculations hgand hgprepare hgjournal hgentries

, hgfor hgthe hgcreation hgof hgahgbusiness hgentity.
Bloom's: Understand
hgAACSB: Analytical

hgThinkinghgAICPA: FN

hgMeasurement