ACC 577 OUTLET Great Stories /acc577outlet.com ACC 577 OUTLET Great Stories /acc577outlet.com | Page 2

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 Saxe's common stock. The stockholders' equity
section of each company's balance sheet immediately before the
combination was: Assume that the merger is accounted for using
the acquisition method of accounting. December 31, 1988
additional paid-in capital should be reported at
Question 5
Scroll, Inc., a wholly owned subsidiary of Pirn, Inc., began
operations on January 1, 2005. The following information is from
the condensed 2005 income statements of Pirn and Scroll:
Additional information:
Sales by Pirn to Scroll are made on the same terms as those made
to third parties. Equipment purchased by Scroll from Pirn for
$36,000 on January 1, 2005, is depreciated using the straight-line
method over four years. In Pirn's December 31, 2005,
consolidating worksheet, how much intercompany profit should
be eliminated from Scroll's inventory?
Question 6
The preparation of consolidated statements likely will require the
following information about the subsidiary's assets and liabilities
at the date of acquisition: