02 Jan 2. Based on the preceding information,
ADVANCED ACCOUNTING
QUIZ CHAPTER 5; SPRING 2014
Finandia Corporation acquired 70% of Prosegur Corporation’s common stock on December 31, 2012. Balance sheet data for the two companies immediately following the acquisition follow:s
FINANDIA
PROSEGUR
Cash
$44,000
$30,000
Accounts Receivable
110,000
45,000
Inventory
130,000
70,000
Land
80,000
25,000
Buildings & Equipment
500,000
400,000
Less: Acc. Depreciation
(223,000)
(165,000)
Investment in Prosegur
150,500
TOTAL ASSETS
$791,500
$405,000
Accounts Payable
$61,500
$28,000
Taxes Payable
95,000
37,000
Bonds Payable
280,000
200,000
Common Stock
150,000
50,000
Retained Earnings
205,000
90,000
TOTAL LIABILITIES & SE
$791,500
$405,000
At the date of the business combination, the book values of Prosegur’s net assets and liabilities approximated fair values except for inventory, which had a fair value of $85,000, and land, which had a fair value of $45,000. The fair value of the noncontrolling interest was $64,500 on December 31, 2012.
1. Based on the preceding information, what amount of inventory will be included in the consolidated balance sheet immediately following the acquisition?
a) $179,000.
b) $200,000.
c) $210,500.
d) $215,000.
2. Based on the preceding information, what amount of goodwill will be included in the consolidated balance sheet immediately following the acquisition?
a) $0.
b) $28,000.
c) $40,000.
d) $52,000
3. Based on the preceding information, what amount of total assets will be included in the consolidated balance sheet immediately following the acquisition?
a) $1,081,000.
b) $1,121,000.
c) $1,196,500.
d) $1,231,500.
4. Based on the preceding information, what amount of total liabilities will be included in the consolidated balance sheet immediately following the acquisition?
a) $265,000.
b) $436,500.
c) $622,000.
d) $701,500.
5. Based on the preceding information, what amount of noncontrolling interest will be included in the consolidated balance sheet immediately following the acquisition?
a) $42,000.
b) $52,500.
c) $60,900.
d) $64,500.
6. Based on the preceding information, what amount of consolidated retained earnings will be included in the consolidated balance sheet immediately following the acquisition?
a) $295,000
b) $268,000
c) $232,000
d) $205,000
7. Based on the preceding information, what amount of total stockholders’ equity will be included in the consolidated balance sheet immediately following the acquisition?
a) $355,000
b) $397,000
c) $419,500
d) $495,000
8) At December 31, 2012, Portil Inc. owned 90% of Antilla Corporation, a consolidated subsidiary, and 20% of Moral Corporation, an investee in which Portil cannot exercise significant influence.
On the same date, Portil had receivables of $300,000 from Antilla and $200,000 from Moral. In its December 31, 2012, consolidated balance sheet, Grey should report accounts receivable from its affiliates of:
a) $500,000.
b) $340,000.
c) $230,000.
d) $200,000.
On January 1st, 2013, Desigual Corporation acquired 80% of Arcos Corporation’s $10 par common stock for $956,000. On this date, the fair value of the noncontrolling interest was $239,000, and the book value of Arcos’s net assets was $1,000,000.
The fair values of Arcos’s identifiable assets and liabilities were the same as their book values except for buildings (net) with a remaining life of 20 years, which were $100,000 in excess of the carrying amount.
For the year ended December 31, 2013, Arcos had net income of $190,000 and paid cash dividends totaling $125,000.
9) In the January 1st, 2013, consolidated balance sheet, the amount of goodwill reported should be:
a) $0.
b) $76,000.
c) $95,000.
d) $156,000
10) In the December 31st, 2013, consolidated balance sheet, the amount of noncontrolling interest reported should be:
a) $200,000.
b) $239,000.
c) $251,000.
d) $252,000.
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