ACC 577 help A Guide to career/uophelp.com ACC 577 help A Guide to career/uophelp.com | Page 36

Question 13
Puff Co. acquired 40% of Straw, Inc.'s voting common stock on January
2, 2005, for $400,000. The carrying amount of Straw's net assets at the
purchase date totaled $900,000. Fair values equaled carrying amounts
for all items except equipment, for which fair values exceeded carrying
amounts by $100,000. The equipment has a five year life. Goodwill, if
any, is expected to have a useful life of 10 years. During 2005, Straw
reported net income of $150,000. What amount of income from this
investment should Puff report in its 2005 income statement?
Question 14
The discount resulting from the determination of a note payable's present
value should be reported on the balance sheet as a(an)
Question 15
Land was purchased to be used as the site for the construction of a plant.
A building on the property was sold and removed by the buyer so that
construction on the plant could begin. The proceeds from the sale of the
building should be
Question 16
Park Co. uses the equity method to account for its January 1, 2004,
purchase of Tun Inc.'s common stock. On January 1, 2004, the fair
values of Tun's FIFO inventory and land exceeded their carrying
amounts. How do these excesses of fair values over carrying amounts
affect Park's reported equity in Tun's 2004 earnings?
Question 17
On July 1, 2005, Pell Co. purchased Green Corp. ten-year, 8% bonds
with a face amount of $500,000 for $420,000. The bonds mature on June