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Question 7
Which one of the following levels of voting ownership is normally
assumed to convey significant influence over an investee?
Question 8
In recording its acquisition of Lambda, Inc., Omega, Inc.
properly recognized a contingent consideration liability of
$28,000 associated with a possible payment based on a target
amount of post-combination 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?