Collins Company reported consolidated revenue of $120,000,000 in 20X8. Collins
operates in two geographic areas, domestic and Asia. The following information
pertains to these two areas:
What calculation below is correct to determine if the revenue test is satisfied for the
Asian operations?
A. $58,000,000/$140,000,000
B. $50,000,000/$120,000,000
C. $58,000,000/$120,000,000
D. $50,000,000/$140,000,000
The Board of Commissioners of Vane City adopted its budget for the year ending July
31, comprising estimated revenues of $30,000,000 and appropriations of $29,000,000.
Vane formally integrates its budget into the accounting records. What entry should be
made for budgeted revenues?
A. Memorandum entry only.
B. Debit ESTIMATED REVENUES CONTROL, $30,000,000.
C. Debit ESTIMATED REVENUES RECEIVABLE CONTROL, $30,000,000.
D. Credit ESTIMATED REVENUES CONTROL, $30,000,000.
Dover Company owns 90% of the capital stock of a foreign subsidiary located in Italy.
Dover’s accountant has just translated the accounts of the foreign subsidiary and
determined that a debit translation adjustment of $80,000 exists. If Dover uses the fully
adjusted equity method for its investment, what entry should Dover record in order to
recognize the translation adjustment?
A. Option A
B. Option B
C. Option C
D. Option D
Pisa Company acquired 75 percent of Siena Company on January 1, 20X3 for
$712,500. The fair value of the noncontrolling interest was equal to 25 percent of book
value. On the date of acquisition, Siena had common stock outstanding of $300,000 and
a balance in retained earnings of $650,000. During 20X3, Siena purchased inventory for
$35,000 and sold it to Pisa for $50,000. Of this amount, Pisa reported $20,000 in ending
inventory in 20X3 and later sold it in 20X4. In 20X4, Pisa sold inventory it had
purchased for $40,000 to Siena for $60,000. Siena sold $45,000 of this inventory in
20X4.
Income and dividend information for Siena for 20X3 and 20X4 are as follows:
Pisa Company uses the cost method.
Required:
a. Present the worksheet consolidation entries necessary to prepare consolidated financial
statements for 20X3.
b. Present the worksheet consolidation entries necessary to prepare consolidated financial
statements for 20X4.
Good Care Hospital, which is operated by a religious organization, received
contributions of $1,000,000 from donors who stipulated that the cash be used to
construct an addition to the hospital. As of the balance sheet date, none of the
contributions had been expended for construction. On the hospital’s balance sheet, the
cash contributions would be disclosed in which of the following classes of net assets?
A. Temporarily restricted net assets
B. Donor restricted net assets
C. Assets whose use is limited
D. Permanently restricted net assets
Lemon Corporation acquired 80 percent of Bricks Corporation’s common shares on
January 1, 20X7, at underlying book value. At that date, the fair value of the
noncontrolling interest was equal to 20 percent of the book value of Bricks Corporation.
Bricks prepared the following balance sheet as of December 31, 20X8:
On January 1, 20X9, Bricks declares a stock dividend of 9,000 shares on its $5 par
value common stock. The current market price per share of Bricks stock on January 1,
20X9, is $20.
Begin with the information provided, but assume instead that Bricks declared a stock
dividend of 3,000 shares on its $5 par value common stock. The investment elimination
entry required to prepare a consolidated balance sheet immediately after the stock
dividend is issued will include a debit to Retained Earnings for:
A. $185,000.
B. $65,000.
C. $155,000.
D. $200,000
Each of the following questions names an item. Select the correct description of the
item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC.
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and
other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. Issued by the staff of the SEC and contains differences that must be corrected in a
registration statement before the securities may be offered or sale.
h. Quarterly report to SEC.
i. Includes new or revised administrative practices and interpretations used in reviewing
financial statements.
j. Includes the results of actions taken against accountants or other participants because
false or misleading statements were filed.
k. Includes Regulations S-X and S-K.
Accounting and Auditing Enforcement Releases
On July 1, 20X8, Cleveland established a capital projects fund to construct a new town
hall. Financing for construction came from the following sources:
Construction of the town hall was completed on June 15, 20X9. For the fiscal year
ended June 30, 20X9, what amount should Cleveland’s capital projects fund report for
revenues on its statement of revenues, expenditures, and changes in fund balance?
A. $1,000,000
B. $1,500,000
C. $3,500,000
D. $14,500,000
On January 1, 20X8, Chariot Company acquired 100 percent of Stryder Company for
$220,000 cash. The trial balances for the two companies on December 31, 20X8,
included the following amounts:
On the acquisition date, Stryder reported net assets with a book value of $170,000. A
total of $10,000 of the acquisition price is applied to goodwill, which was not impaired
in 20X8. Stryder’s depreciable assets had an estimated economic life of 10 years on the
date of combination. The difference between fair value and book value of tangible
assets is related entirely to buildings and equipment. Chariot used the equity method in
accounting for its investment in Stryder. Analysis of receivables and payables revealed
that Stryder owed Chariot $10,000 on December 31, 20X8.
Based on the information provided, the beginning differential assigned to buildings and
equipment is:
A. $50,000.
B. $40,000.
C. $10,000.
D. $36,000.
On January 1, 20X6, Interstate Corporation acquired 70 percent of Catapult Company’s
common stock for $210,000 cash. The fair value of the noncontrolling interest at that
date was determined to be $90,000. Data from the balance sheets of the two companies
included the following amounts as of the date of acquisition:
Interstate Catapult
Cash $50,000 $15,000
Accounts Receivable 70,000 25,000
Inventory 30,000 20,000
Land 150,000 80,000
Buildings and Equipment 250,000 200,000
Less: Accumulated Depreciation (70,000) (20,000)
Investment in Catapult Co. 210,000
Total Assets $690,000 $320,000
Accounts Payable $40,000 $10,000
Bonds Payable 150,000 40,000
Common Stock 300,000 90,000
Retained Earnings 200,000 180,000
Total Liabilities and Equity $690,000 $320,000
At the date of the business combination, the book values of Catapult’s assets and
liabilities approximated fair value except for inventory, which had a fair value of
$30,000, and land, which had a fair value of $95,000.
Based on the preceding information, what amount of total assets will be reported in the
consolidated balance sheet prepared immediately after the business combination?
A. $800,000
B. $830,000
C. $1,010,000
D. $1,040,000
Pace Corporation acquired 100 percent of Spin Company’s common stock on January 1,
20X9. Balance sheet data for the two companies immediately following the acquisition
follow:
At the date of the business combination, the book values of Spin’s net assets and
liabilities approximated fair value except for inventory, which had a fair value of
$60,000, and land, which had a fair value of $50,000. The fair value of land for Pace
Corporation was estimated at $80,000 immediately prior to the acquisition.
Based on the preceding information, what amount of liabilities will be reported in the
consolidated balance sheet prepared immediately after the business combination?
A. $615,000
B. $406,000
C. $300,000
D. $265,000
When a partnership is formed, noncash assets contributed by partners should be
recorded:
I. at their respective book values for income tax purposes.
II. at their respective fair values for financial accounting purposes.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by
purchasing 40,000 shares of Siena’s common stock. There was no differential related to
this transaction. The noncontrolling interest had a fair value equal to 20 percent of book
value. The book value of Siena on December 31, 20X7 was as follows:
On January 1, 20X8, Siena sold an additional 12,500 shares to a nonaffiliate for $25 per
share.
Based on the preceding information, what is Pisa’s new ownership interest?
A. 84 percent
B. 55 percent
C. 70 percent
D. 64 percent
On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by
purchasing 40,000 shares of Siena’s common stock. There was no differential related to
this transaction. The noncontrolling interest had a fair value equal to 20 percent of book
value. The book value of Siena on December 31, 20X7 was as follows:
On January 1, 20X8, Pisa purchased an additional 12,500 shares directly from Siena for
$25 per share.
Based on the preceding information, the ending balance in Additional Paid-In Capital
would be:
A. $0
B. $187,500
C. $312,500
D. $125,000
A tax collection fund that collects property taxes and then distributes them to local
governmental units is an example of a(n):
A. trust fund.
B. agency fund.
C. internal service fund.
D. permanent fund.
Each of the following questions names an item. Select the correct description of the
item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC.
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and
other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. Issued by the staff of the SEC and contains differences that must be corrected in a
registration statement before the securities may be offered or sale.
h. Quarterly report to SEC.
i. Includes new or revised administrative practices and interpretations used in reviewing
financial statements.
j. Includes the results of actions taken against accountants or other participants because
false or misleading statements were filed.
k. Includes Regulations S-X and S-K.
“Red Herring” Prospectus
Earth Company owns 100 percent of the capital stock of both Mars Corporation and
Venus Corporation. Mars purchases merchandise inventory from Venus at 125 percent
of Venus’s cost. During 20X8, Venus sold inventory to Mars that it had purchased for
$25,000. Mars sold all of this merchandise to unrelated customers for $56,892 during
20X8. In preparing combined financial statements for 20X8, Earth’s bookkeeper
disregarded the common ownership of Mars and Venus.
Based on the information given above, by what amount was unadjusted revenue
overstated in the combined income statement for 20X8?
A. $25,000
B. $56,892
C. $31,250
D. $6,250
On December 1, 20X8, Hedge Company entered into a 60-day speculative forward
contract to sell 200,000 British pounds () at a forward rate of 1 = $1.78. On the same
day it purchased a 60-day speculative forward contract to buy 100,000 euros (€) at a
forward rate of €1 = $1.42.
The rates are as follows:
Hedge had no other speculation transactions in 20X8 and 20X9. Ignore taxes.
Based on the preceding information, what is the effect of the British pound speculative
contract on 20X8 net income?
A. $10,000 gain
B. $6,000 gain
C. $8,000 gain
D. $2,000 loss
Assuming there is a budget surplus, which of the following accounts are credited when
the general fund records its operating budget at the beginning of the year?
A. Appropriations Control and Budgetary Fund Balance—Unassigned.
B. Estimated Revenues Control and Estimated Residual Equity Transfer Out.
C. Budgetary Fund Balance—Assigned For Encumbrances and Expenditures.
D. Estimated Residual Equity Transfer Out and Estimated Transfer In.
Given the increased development of complex business structures, which of the
following regulators is responsible for the continued usefulness of accounting reports?
A. Securities and Exchange Commission (SEC)
B. Public Company Accounting Oversight Board (PCAOB)
C. Financial Accounting Standards Board (FASB)
D. All of the above
A private not-for-profit university generally must depreciate all tangible fixed assets,
except:
I. works of art and other historical treasures.
II. administration buildings.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
A debtor-in-possession balance sheet should report:
I. Liabilities not subject to compromise.
II. Liabilities subject to compromise.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
Push Company owns 60% of Shove Company’s outstanding common stock. Intra-entity
sales are as follows:
Assume Shove sold the inventory to Push. Using the fully adjusted equity method, what
journal entry would be recorded by Push to defer the unrealized gross profit on inventory
sales to Shove in 20X1?
A donor agrees to contribute $5,000 per year at the end of each of the next five years to
a voluntary health and welfare organization. The donor did not place any use
restrictions on the amount pledged. The stream of the payments is discounted at 6
percent. The first payment of $5,000 is received at the end of the first year. The present
value factor for a five-payment annuity due on June 30, 20X9, at 6 percent is 4.2124.
Based on the preceding information, the increase in present value of the contributions
receivable recognized at the end of the first year equals:
A. $5,000.
B. $1,264.
C. $4,212.
D. $787.
On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of
Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000
and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held
by Yang was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively.
Based on the preceding information, what amount will be reported by Yang as income
from its investment in Spiel for 20X8 if it used the fair value option to account for its
investment in Spiel?
A. $11,250
B. $2,500
C. $6,250
D. $7,500
From an investor’s point of view, a liquidating dividend from an investee is:
A. A dividend declared by the investee in excess of its earnings in the current year.
B. A dividend declared by the investee in excess of its earnings since acquisition by the
investor.
C. Any dividend declared by the investee since acquisition.
D. A dividend declared by the investee in excess of the investee’s retained earnings.
A private, not-for-profit geographic society received cash contributions which were
restricted by the donors for the acquisition of fixed assets. In which section of the
statement of cash flows would these cash contributions be reported?
A. Financing activities
B. Investing activities
C. Operating activities
D. Capital and related financing activities
Electric Corporation holds 80 percent of Utility Company’s voting common shares,
acquired at book values, but none of its preferred shares. At the date of acquisition, the
fair value of the noncontrolling interest was equal to 20 percent of the book value of
Utility Company. Summary balance sheets for the companies on December 31, 20X8,
are as follows:
Neither of the preferred issues is convertible. Electric’s preferred pays a 8 percent
annual dividend, and Utility’s preferred pays a 12 percent dividend. Utility reported net
income of $30,000 and paid a total of $10,000 of dividends in 20X8. Electric reported
income from its separate operations of $70,000 and paid total dividends of $25,000 in
20X8.
Based on the preceding information, what is the amount of earnings available to
common shareholders reported in the consolidated financial statements for the year?
A. $89,200
B. $87,000
C. $91,000
D. $82,800
An analysis of Abbey Company’s operating segments provides the following
information:
Refer to the above information. Which of the operating segments above meet the
revenue test?
A. B, D, and E
B. A and D
C. A, B, and D
D. B, C, D, and E
Myway Company sold equipment to a Canadian company for 100,000 Canadian dollars
(C$) on January 1, 20X9 with settlement to be in 60 days. On the same date, Myway
entered into a 60-day forward contract to sell 100,000 Canadian dollars at a forward
rate of 1 C$ = $.94 in order to manage its exposed foreign currency receivable. The
forward contract is not designated as a hedge. The spot rates were:
Based on the preceding information, the entry to revalue foreign currency payable to
current U.S. dollar value on March 1 will have:
A. a credit to Foreign Currency Transaction Gain for $1,500.
B. a debit to Foreign Currency Transaction Loss for $2,500.
C. a debit to Foreign Currency Transaction Loss for $1,500.
D. a credit to Foreign Currency Transaction Gain for $1,000.
Hilldale Corporation purchased land on January 1, 20X0, for $60,000. On August 7,
20X2, it sold the land to its subsidiary, Allen Corporation, for $35,000. Hilldale owns
60 percent of Allen’s voting shares
Based on the preceding information, what will be the worksheet consolidation entry to
remove the effects of the intercompany sale of land in preparing the consolidated
financial statements for 20X2?
A. Land 15,000
Loss on Sale of Land 15,000
B. Land 25,000
Loss on Sale of Land 25,000
C. Loss on Sale of Land 15,000
Land 15,000
D. Loss on Sale of Land 25,000
Land 25,000
The BIG Partnership has decided to liquidate at December 31, 20X8. The capital and
loan balances of the partners at December 31, 20X8, are provided below:
If you were to calculate the Loss Absorption Power for each partner, how would the
partners rank (from highest to lowest LAP)?
A. B, I, G
B. I, B, G
C. B, G, I
D. G, I, B
When Disney and Charles decided to incorporate their partnership, the trial balance was
as follows:
The partnership’s books will be closed, and new books will be used for D & C
Corporation. The following additional information is available:
1) The estimated fair values of the assets follow:
2) All assets and liabilities are transferred to the corporation.
3) The common stock is $5 par. Alice and Betty receive a total of 24,000 shares.
4) Disney and Charles share profits and losses in the ratio 6:4.
Required:
a. Prepare the entries on the partnership’s books to record (1) the revaluation of assets,
(2) the
transfer of the assets to the D & C Corporation and the receipt of the common stock,
and (3) the closing of the books.
b. Prepare the entries on D & C Corporation’s books to record the assets and the
issuance of the common stock.
Perth Corporation owns 90 percent of Dundee Company’s stock. At the end of 20X8,
Perth and Dundee reported the following partial operating results and inventory
balances:
Perth regularly prices its products at cost plus a 30 percent markup for profit. Dundee
prices its sales at cost plus a 10 percent markup. The total sales reported by Perth and
Dundee include both intercompany sales and sales to nonaffiliates.
Based on the information given above, what balance will be reported for inventory in
the consolidated balance sheet for December 31, 20X8?
A. $56,573
B. $23,846
C. $32,727
D. $67,000
Siera, Lani, and Cecilia are partners in an equipment leasing business that has not been
able to generate the type of revenue expected by the partners. They share profits and
losses in a ratio of 5:3:2, respectively. They have decided to liquidate the business and
have sold all the assets except for one piece of heavy machinery. All the partners are
personally insolvent. The machinery has a book value of $120,000, and the partners
have capital balances as follows:
Siera, Capita $40,000
Lani, Capital $20,000
Cecilia, Capital $30,000
Each of the following is an independent case.
Refer to the information given above. What amount of cash will each partner receive as
a liquidating distribution if the machinery is sold for $44,000?
Siera Lani Cecilia
A. $2,000 $2,800 $14,800
B. $2,000 $0 $14,000
C. $0 $0 $14,000
D. $0 $0 $16,000
In the LMN partnership, Lynn’s capital is $60,000, Marty’s is $80,000, and Nancy’s is
$70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the
partnership. Each of the following questions is independent of the others.
Refer to the above information. Nancy is paid $84,000, and no goodwill is recorded.
What is Lynn’s capital balance after Nancy withdraws from the partnership?
A. $68,000
B. $54,000
C. $53,000
D. $52,000
Portfolio Corporation acquired 70 percent ownership of Index Company on January 1,
20X6, at underlying book value. At that date, the fair value of the noncontrolling
interest was equal to 30 percent of the book value of Index. On January 1, 20X8,
Portfolio sold 1,000 shares of Index Company for $20,000 to Adventure Corporation
and recorded a $5,000 gain. Trial balances for the companies on December 31, 20X8,
contain the following data:
Index Company’s net income was earned evenly throughout the year. Both companies
declared and paid their dividends on December 31, 20X8. Portfolio uses the fully
adjusted equity method in accounting for its investment in Index.
Required:
1) Prepare the elimination entries needed to complete a full consolidation worksheet for
20X8.
2) Prepare a consolidation worksheet for 20X8.
Discuss major differences between a governmental entity’s uses of the modified accrual
method and a for-profit corporation’s use of the accrual method.
The transactions described in the following questions occurred in a voluntary health and
welfare organization during the year ended December 31, 20X8. For each transaction,
indicate its effect(s) on the organization’s statement of activities prepared for the year
ended December 31, 20X8. List all effects of transactions affecting more than one class
of net assets. Indicate your choice(s) by entering the letter corresponding to the effects
listed here:
Expended 75 percent of the contributions previously received from donors for research.
Iona Corporation is in the process of preparing its financial statements for the first
quarter of 20X9 and has asked your advice as to how to report several items. These
items include the following events which took place during the first quarter of 20X9
(assume all amounts are material):
1) Iona redeemed bonds with a carrying value of $4,000,000 at a cost of $3,760,000.
This early extinguishment occurred because Iona wants to issue new debt at lower
interest rates.
2) Iona uses the LIFO method for its inventories. On January 1, 20X9, inventories
amounted to $10,000,000, while, on March 31, 20X9, inventories totaled $9,200,000.
Iona expects to replace the liquidated inventory at the beginning of the second quarter
at a cost of $1,000,000.
3) Iona changed its depreciation method on $4,000,000 of its delivery trucks from the
declining balance method to the straight-line method. On January 1, 20X9, accumulated
depreciation under the declining balance method was $2,800,000. Had the straight-line
method been used, accumulated depreciation on January 1, 20X9, would have been
$2,300,000. The remaining life of the trucks is two years.
4) Iona pays its top executives a bonus at year-end of 6 percent of operating income
before bonus and income taxes. Operating income before bonus and income taxes for
the three months ended March 31, 20X9, was $10,000,000. Iona estimates that its
yearly operating income before bonus and income taxes will be $60,000,000.
5) Iona closes its manufacturing operations in July of each year in order to make its
major annual repairs. Iona estimates that the cost of these repairs in 20X9 will be
$1,000,000.
Required:
For each of the events numbered 1 through 5, indicate how that event should be
reported on Iona’s income statement for the three months ended March 31, 20X9, and
the balance sheet accounts effects at March 31, 20X9. Ignore income taxes.
Consolidated financial statements are required by GAAP in certain circumstances. This
information can be very useful to stockholders and creditors. Yet, there are limitations
to these financial statements for which the users must be aware. What are at least three
(3) limitations of consolidated financial statements?
Which of the following recognition and measurement bases best summarizes the usual
treatment of current contributions to private not-for-profit entities in accordance with
ASC 958?
On March 15, 20X7, Barrel Company paid property taxes of $120,000 on its factory
building for calendar year 20X7. On July 1, 20X7, Barrel made $20,000 in
unanticipated repairs to its machinery. The repairs will benefit operations for the
remainder of the calendar year. What total amount of these expenses should be included
in Barrel’s quarterly income statement for the three months ended September 30, 20X7?
A. $30,000
B. $35,000
C. $40,000
D. $50,000
Pie Company acquired 75 percent of Strawberry Company’s stock at the underlying
book value on January 1, 20X8. At that date, the fair value of the noncontrolling interest
was equal to 25 percent of the book value of Strawberry Company. Strawberry
Company reported shares outstanding of $350,000 and retained earnings of $100,000.
During 20X8, Strawberry Company reported net income of $60,000 and paid dividends
of $3,000. In 20X9, Strawberry Company reported net income of $90,000 and paid
dividends of $15,000. The following transactions occurred between Pie Company and
Strawberry Company in 20X8 and 20X9:
Strawberry Co. sold equipment to Pie Co. for a $42,000 gain on December 31, 20X8.
Strawberry Co. had originally purchased the equipment for $140,000 and it had a
carrying value of $28,000 on December 31, 20X8. At the time of the purchase, Pie Co.
estimated that the equipment still had a seven-year remaining useful life.
Pie Co. sold land costing $90,000 to Strawberry Co. on June 28, 20X9, for $110,000.
Required:
Give all consolidating entries needed to prepare a consolidation worksheet for 20X9
assuming that Pie Co. uses the fully adjusted equity method to account for its
investment in Strawberry Company.
Gotham City acquires $25,000 of inventory on November 1, 20X7, having held no
inventory previously. On December 31, 20X7, the end of Gotham City’s fiscal year, a
physical count shows $8,000 still in stock. During 20X8, $6,500 of this inventory is
used, resulting in a $1,500 remaining balance of supplies on December 31, 20X8.
Based on the preceding information, which of the following would be the correct
account balances for 20X8 if Gotham City used the purchase method of accounting for
inventories?
SeaLine Corporation is involved in the distribution of processed marine products. The
fair values of assets and liabilities held by three reporting units and other information
related to the reporting units owned by SeaLine are as follows:
Required: Determine the amount of goodwill that SeaLine should report in its current
financial statements.
Corporation X has a number of exporting transactions with companies based in
Vietnam. Exporting activities result in receivables. If the settlement currency is the US
dollar, which of the following will happen by changes in the direct or indirect exchange
rates?
GASB 34 requires a Reconciliation schedule for the Statement of Net Assets. What
does this schedule document?
The SRT partnership agreement specifies that partnership net income be allocated as
follows:
Partner S Partner R Partner T
Salary allowance $20,000 $25,000 $15,000
Interest on average capital balance 10% 10% 10%
Remainder 30% 30% 40%
Average capital balances for the current year were $60,000 for S, $50,000 for R, and
$40,000 for T.
Refer to the information given. Assuming a current year net income of $45,000, what
amount should be allocated to each partner?
Partner S Partner R Partner T
A. $17,000 $21,000 $7,000
B. ($9,000) ($9,000) ($12,000)
C. $13,500 $13,500 $18,000
D. $22,500 $22,500 $0
Maple Corporation and its subsidiary reported consolidated net income of $380,000 for
the year ended December 31, 20X5. Maple owns 75% of the common shares of its
subsidiary, acquired at book value. Noncontrolling interest was assigned income of
$25,000 in the consolidated income statement for 20X5. What is the amount of separate
operating income reported by Maple for the year?
A. $95,000
B. $100,000
C. $280,000
D. $285,000
The transactions described in the following questions occurred in a voluntary health and
welfare organization during the year ended December 31, 20X8. For each transaction,
indicate its effect(s) on the organization’s statement of activities prepared for the year
ended December 31, 20X8. List all effects of transactions affecting more than one class
of net assets. Indicate your choice(s) by entering the letter corresponding to the effects
listed here:
The governing board designated assets for plant expansion.