ACC 562 help A Guide to career/uophelp.com ACC 562 help A Guide to career/uophelp.com | Page 18

63. Simco's shaving products division was acquired over ten years ago in
a purchase transaction by BlizzardCraft. The related goodwill was
amortized until 2002 and $4.5 million remained on the books thereafter.
In 2008, Simco's production machinery was assessed for impairment as
a long-lived asset because of obsolescence issues. What relationship will
the auditors most likely make between the facts stated above? (Points: 4)
BlizzardCraft erroneously treated the acquisition of Simco as a
purchase transaction when it should have been a pooling of interests.
Simco should not have amortized goodwill previous to 2002.
Simco's goodwill should have been written off when purchased by
BlizzardCraft in a one-time transaction.
The goodwill related to Simco may have been impaired during 2008.
64. All of the following represent a related entity to an organization
except (Points: 4)
the president's son.
an affiliate with common ownership.
customers.
primary owners.
65. All of the following represent equity issuance requiring prominent
accounting, presentation and disclosure treatment, except (Points: 4)
stock with beneficial conversion features.
Warrants issued to a consultant for services performed.
Preferred stock that is cumulative and par value is $0.50 per share.
Dividends have not been paid on common stock since inception.