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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:
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