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Week 6 Quiz Review: ACC 577
Question 1
At the time Company P acquired controlling interest of Company S the
following accounts and balances existed on the books of the two
companies: Which one of the following amounts should be eliminated in
preparing a consolidated balance sheet immediately following the
business combination?
Question 2
In which one of the following cases will a non-cash asset transferred as
consideration in a business combination be measured at carrying value,
not at fair value?
Question 3
On January 1, 200x Ritt Corp. purchased 80% of Shaw Corp.'s $10 par
common stock for $975,000. On this date, the carrying amount of
Shaw's net assets was $1,000,000. The fair values of Shaw's identifiable
assets and liabilities were the same as their carrying amounts except for
plant assets (net) which were $100,000 in excess of the carrying amount.
On that date, the fair value of the 20% noncontrolling interest in Shaw
was appropriately determined to be $200,000. For the year ended
December 31, 200x, Shaw had net income of $190,000 and paid cash
dividends totaling $125,000. In the January 1, 200x consolidated balance
sheet, goodwill should be reported at
Question 4
On December 31, 1988, Saxe Corporation was merged into Poe
Corporation. In the business combination, Poe issued 200,000 shares of
its $10 par common stock, with a market price of $18 a share, for all of