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1. For business combinations involving less than 100 percent ownership, the
acquirer recognizes and measures all of the following at the acquisition date
except
:
2. When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts
owned land with a book value of $70,000 and a fair value of $100,000.
What amount should have been reported for the land in a consolidated balance
sheet at the acquisition date?
3. When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts
owned land with a book value of $70,000 and a fair value of $100,000.
What is the total amount of excess land allocation at the acquisition date?
4. When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts
owned land with a book value of $70,000 and a fair value of $100,000.
What is the amount of excess land allocation attributed to the controlling interest
at the acquisition date?
5. When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts
owned land with a book value of $70,000 and a fair value of $100,000.
What is the amount of excess land allocation attributed to the non-controlling
interest at the acquisition date?
6. When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts
owned land with a book value of $70,000 and a fair value of $100,000.
What amount should have been reported for the land in a consolidated balance
sheet, assuming the investment was obtained prior to January 1, 2009 and the
purchase method of accounting for business combinations was used?
7. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.
The fair value of Float's net assets was $1,850,000, and the book value was
$1,500,000. The non-controlling interest shares of Float Corp. are not actively
traded.
What is the total amount of goodwill recognized at the date of acquisition?
8. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.
The fair value of Float's net assets was $1,850,000, and the book value was
$1,500,000. The non-controlling interest shares of Float Corp. are not actively
traded.
What amount of goodwill should be attributed to Perch at the date of
acquisition?
9. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.
The fair value of Float's net assets was $1,850,000, and the book value was
$1,500,000. The non-controlling interest shares of Float Corp. are not actively
traded.
What amount of goodwill should be attributed to the non-controlling interest at
the date of acquisition?
10. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.
The fair value of Float's net assets was $1,850,000, and the book value was
$1,500,000. The non-controlling interest shares of Float Corp. are not actively
traded.
What is the dollar amount of
non-controlling interest
that should appear in a
consolidated balance sheet prepared at the date of acquisition?
11. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.
The fair value of Float's net assets was $1,850,000, and the book value was
$1,500,000. The non-controlling interest shares of Float Corp. are not actively
traded.
What is the dollar amount of Float Corp.'s net assets that would be represented
in a consolidated balance sheet prepared at the date of acquisition?
12. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.
The fair value of Float's net assets was $1,850,000, and the book value was
$1,500,000. The non-controlling interest shares of Float Corp. are not actively
traded.
What is the dollar amount of fair value over book value differences attributed to
Perch at the date of acquisition?
13. Femur Co. acquired 70% of the voting common stock of Harbor Corp. on
January 1, 2010. During 2010, Harbor had revenues of $2,500,000 and expenses of
$2,000,000. The amortization of excess cost allocations totaled $60,000 in 2010.
The non-controlling interest's share of the earnings of Harbor Corp. is calculated
to be
14. Femur Co. acquired 70% of the voting common stock of Harbor Corp. on
January 1, 2010. During 2010, Harbor had revenues of $2,500,000 and expenses of
$2,000,000. The amortization of excess cost allocations totaled $60,000 in 2010.
What is the effect of including Harbor in consolidated net income for 2010?
15. Denber Co. acquired 60% of the common stock of Kailey Corp. on
September 1, 2010. For 2010, Kailey reported revenues of $810,000 and expenses
of $630,000, all reflected evenly throughout the year. The annual amount of
amortization related to this acquisition was $15,000.
In consolidation, the total amount of expenses related to Kailey, and to Denber's
acquisition of Kailey, for 2010 is determined to be
16. Denber Co. acquired 60% of the common stock of Kailey Corp. on
September 1, 2010. For 2010, Kailey reported revenues of $810,000 and expenses
of $630,000, all reflected evenly throughout the year. The annual amount of
amortization related to this acquisition was $15,000.
What is the effect of including Kailey in consolidated net income for 2010?
17. Denber Co. acquired 60% of the common stock of Kailey Corp. on
September 1, 2010. For 2010, Kailey reported revenues of $810,000 and expenses
of $630,000, all reflected evenly throughout the year. The annual amount of
amortization related to this acquisition was $15,000.
What is the amount of net income to the controlling interest for 2010?
18. Denber Co. acquired 60% of the common stock of Kailey Corp. on
September 1, 2010. For 2010, Kailey reported revenues of $810,000 and expenses
of $630,000, all reflected evenly throughout the year. The annual amount of
amortization related to this acquisition was $15,000.
What is the amount of the non-controlling interest's share of Denber's income for
2010?
19. MacHeath Inc. bought 60% of the outstanding common stock of Nomes Inc.
in an acquisition business combination that resulted in the recognition of
goodwill. Nomes owned a piece of land that cost $250,000 but was worth
$600,000 at the date of acquisition. What value would be attributed to this land in
a consolidated balance sheet at the date of acquisition?
20. Kordel Inc. acquired 75% of the outstanding common stock of Raxston
Corp. Raxston currently owes Kordel $500,000 for inventory acquired over the
past few months. In preparing consolidated financial statements, what amount of
this debt should be eliminated?
21. Royce Co. acquired 60% of Park Co. for $420,000 on December 31, 2010
when Park's book value was $560,000. The Royce stock was not actively traded.
On the date of acquisition, Park had equipment (with a ten-year life) that was
undervalued in the financial records by $140,000. One year later, the following
selected figures were reported by the two companies. Additionally, no dividends
have been paid.
What is consolidated net income for 2011 attributable to Royce's controlling
interest?
