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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?
Question 11
Parco owns 100% of its subsidiary, Subco, which it acquired at
book value. It carries its investment in Subco on its books
using the equity method of accounting. At the beginning of its
2009 fiscal year, the investment in Subco account was $552,000.
During 2009 Subco reported the following: In preparing its
2009 fiscal year consolidated statements, which one of the