ACC 577 OUTLET Learn by Doing/acc577outlet.com ACC 577 OUTLET Learn by Doing/acc577outlet.com | Page 58

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:
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