Chpt 4 Advanced Accounting

Regardless of its % ownership, when a parent acquires control over a subsidiary, the parent must recognize the noncontrolling interest at its

acquisition date fair value

Consolidation Entry I represents part of a sequence of worksheet entries that bring the Investment in the subsidiary account to a ___________ balance

zero

When a parent acquires additional shares in its controlled subsidiary from the noncontrolling interest, any excess of the consolidated book value of these shares over the price paid by the parent is recorded as an 1. an increase in the parent's APIC 2. a loss on acquisition of noncontrolling shares 3. a gain on acquisition of noncontrolling shares 4. a decrease in the parent's APIC

1

Which of the following are included in the calculation of Pawn Company's end-of-the-year 20% NCI when the parent has paid a control premium? 1. 20% of goodwill recognized in the buz combination 2. 20% of subsidiary's beginning of year BV 3. 20% of excess fair value allocation for subsidiary's beginning-of-year identifiable net assets 4. current year net income allocation to noncontrolling interest

2, 3, 4

A parent owns 80% of the voting stock of a subsidiary. What percentage of the subsidiary's NI (after excess acquisition-date fair value amortizations) is attributable to the noncontrolling interests?

20%

In periods subsequent to acquisition, NCI valuation in consolidated financial reports is based on 1. the current carrying amounts of the subsidiary's assets and liabilities 2. acquisition date fair value adjusted for the NCI's share of post acquisition adjusted subsidiary NI 3. current fair value of NCI equity shares 4. acquisition date fair value adjusted for the NCI's share of post acquisition adjusted subsidiary NI less dividents

4

The beginning balance of the NCI can be viewed as the the NCI's ownership share multiplied by the sum of which of the following two components? 1. The book value of the subsidiary as of the beginning of the period 2. The unamortized excess acquisition date fair value over book value as of the beginning of the period 3. The fair value of the subsidiary as of the beginning of the period 4. The acquisition date excess FV over BV for the subsidiary

1, 2

The allocation of Goodwill across the controlling and noncontrolling interest: 1. Compares acquisition date total fair values to the relative (proportional) fair values of the subsidiary's identifiable net assets 2. proceeds in a similar fashion when the buz combination results in bargain purchase 3. always results in all goodwill being allocated to the parent company 4. Does not always result in an allocation proportional to percentage ownership interests

1, 4

Which of the following items where noncontrolling interest amounts appear in consolidated FS 1. In the consolidated income statement as an allocation of of consolidated NI 2. as an asset on the BS 3. as a liability in the consolidated BS 4. in the consolidated owners equity section

1, 4

Which of the following are identified and measured by an acquiring firm as of the date of a 90% subsidiary acquisition 1. 100% of all subsidiary assets and liabilities at full fair values 2. 90% of all subsidiary assets and liability at full fair values 3. Noncontrolling interests at acquisition date fair values 4. Goodwill or a gain from bargain purchase

1,2,3

When the sum of the acquisition date fair values of the controlling and noncontrolling interest exceeds the collective acquisition-date fair values of the subsidiary's identifiable net assets, then the acquiring company recognizes ______________________

Goodwill