with a possible payment based on a target amount of postcombination cash flow from operations. Shortly after the combination, but during the measurement period, the national economy experienced a significant downturn which made it unlikely that the target amount would be reached. As a consequence, at the end of Omega ' s fiscal period, the liability was properly revalued to a fair value of $ 9,000. Which one of the following is the amount of gain or loss that will be recognized in income as a result of the reevaluation of the contingent liability?
Question 9
Beni Corp. purchased 100 % of Carr Corp.' s outstanding capital stock for $ 430,000 cash. Immediately before the purchase, the balance sheets of both corporations reported the following: On the date of purchase, the fair value of Carr ' s assets was $ 50,000 more than the aggregate carrying amounts. In the consolidated balance sheet prepared immediately after the purchase, the consolidated stockholders ' equity should amount to:
Question 10
Which one of the following methods, if any, may a parent use on its books to carry an investment in a subsidiary that it will consolidate?
Question 11
Parco owns 100 % of its subsidiary, Subco, which it acquired at book value. It carries its investment in Subco on its books using the equity method of accounting. At the beginning of its 2009 fiscal year, the investment in Subco account was $ 552,000. During 2009 Subco reported the following: In preparing its 2009 fiscal year consolidated statements, which one of the following is the total amount of equity revenue that Parco will have to reverse for 2009 as a result of it ownership of Subco?