On January 1, Year 1, Dallas, Inc. acquired 80% of Style, Inc.'s outstanding common stock for USD120,000. On that date, the carrying amounts of Style's assets and liabilities approximated their fair values. During Year 1, Style paid USD5,000 cash dividends to its stockholders. Summarized balance sheet information for the two companies follows:DallasStyle12/31/Year 112/31/Year 11/1/Year 1Investment in Style (equity method)USD132,000Other assets138,000USD115,000USD100,000USD270,000USD115,000USD100,000Common stockUSD50,000USD20,000USD20,000Additional paid-in capital80,25044,00044,000Retained earnings139,75051,00036,000USD270,000USD115,000USD100,000What amount should Dallas report as its share of the earnings from subsidiary, in its Year 1 income statement?

1 .On July 2, Year 1, Wynn, Inc., purchased as an available-for-sale security a USD1,000,000 face value Kean Co. 8% bond for USD910,000 plus accrued interest to yield 10%. The bonds mature on January 1, Year 7, and pay interest annually on January 1. On December 31, Year 1, the bonds had a market value of USD945,000. On February 13, Year 2, Wynn sold the bonds for USD920,000. In its December 31, Year 1, balance sheet, what amount should Wynn report for available-for-sale investments in debt securities?

A USD910,000 B USD920,000 C USD945,000 D USD950,000

题型: 单选题 提问时间: 2021-08-24

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2 .Beach Co. determined that the decline in the fair value (FV) of an investment was below the amortized cost and other than temporary. The investment was classified as available-for-sale on Beach's books. The controller would properly record the decrease in FV under U.S. GAAP by including it in which of the following?

A Earnings section of the income statement and writing down the cost basis to FV. B Extraordinary items section of the income statement, net of tax, and writing down the cost basis to FV. C Other comprehensive income section of the income statement only. D Other comprehensive income section of the i...

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3 .Sun Corp. had investments in marketable equity securities costing USD650,000. On June 30, Year 2, Sun decided to hold the investments indefinitely and accordingly reclassified them from trading to available-for-sale on that date. The investments' market value was USD575,000 at December 31, Year 1, USD530,000 at June 30, Year 2, and USD490,000 at December 31, Year 2.What amount of loss from investments should Sun report in its Year 2 income statement?

A USD85,000 B USD160,000 C USD120,000 D USD45,000

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4 .Penn, Inc., a manufacturing company, owns 75% of the common stock of Sell, Inc., an investment company. Sell owns 60% of the common stock of Vane, Inc., an insurance company. In Penn's consolidated financial statements, should consolidation accounting or equity method accounting be used for Sell and Vane?

A Consolidation used for both Sell and Vane. B Equity method used for Sell and consolidation used for Vane. C Equity method used for both Sell and Vane. D Consolidation used for Sell and equity method used for Vane.

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5 .On January 2 of the current year, Peace Co. paid USD310,000 to purchase 75% of the voting shares of Surge Co. Peace reported retained earnings of USD80,000, and Surge reported contributed capital of USD300,000 and retained earnings of USD100,000. The purchase differential was attributed to depreciable assets with a remaining useful life of 10 years. Peace used the equity method in accounting for its investment in Surge. Surge reported net income of USD20,000 and paid dividends of USD8,000 during the current year. Peace reported income, exclusive of its income from Surge, of USD30,000 and paid dividends of USD15,000 during the current year. What amount will Peace report as dividends declared and paid in its current year's consolidated statement of retained earnings?

A USD8,000 B USD23,000 C USD21,000 D USD15,000

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7 .On January 1, Year 1, Dallas, Inc. acquired 80% of Style, Inc.'s outstanding common stock for USD120,000. On that date, the carrying amounts of Style's assets and liabilities approximated their fair values. During Year 1, Style paid USD5,000 cash dividends to its stockholders. Summarized balance sheet information for the two companies follows:DallasStyle12/31/Year 112/31/Year 11/1/Year 1Investment in Style (equity method)USD132,000Other assets138,000USD115,000USD100,000USD270,000USD115,000USD100,000Common stockUSD50,000USD20,000USD20,000Additional paid-in capital80,25044,00044,000Retained earnings139,75051,00036,000USD270,000USD115,000USD100,000What amount of total stockholders' equity should be reported in Dallas' December 31, Year 1, consolidated balance sheet?

A USD286,000 B USD303,000 C USD270,000 D USD385,000

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8 .The separate condensed balance sheets and income statements of Purl Corp. and its wholly-owned subsidiary, Scott Corp., are as follows:Balance SheetsDecember 31,Year 1PurlScottAssetsCurrent assetsCashUSDUSD80,000USDUSD60,000Accounts receivable (net)140,00025,000Inventories90,00050,000Total current assets310,000135,000Property, plant, and equipment (net)625,000280,000Investment in Scott (equity method)400,000?Total assetsUSD1,335,000USD415,000Liabilities and Stockholders' EquityCurrent liabilitiesAccounts payableUSD160,000USD95,000Accrued liabilities110,00030,000Total current liabilities270,000125,000Stockholders' equityCommon stock (USD10 par)300,00050,000Additional paid-in capital?10,000Retained earnings765,000230,000Total stockholders' equity1,065,000290,000Total liabilities and stockholders' equityUSD1,335,000USD415,000Income StatementsYear Ended December 31, Year 1PurlScottSalesUSD2,000,000USD750,000Cost of goods sold1,540,000500,000Gross margin460,000250,000Operating expenses260,000150,000Operating income200,000100,000Equity in earnings of Scott70,000?Income before income taxes270,000100,000Provision for income taxes60,00030,000Net incomeUSD210,000USD70,000Additional information:1.On January 1, Year 1, Purl purchased for USD360,000 all of Scott's USD10 par, voting common stock.2.On January 1, Year 1, the fair value of Scott's assets and liabilities equaled their carrying amount of USD395,000 and USD145,000, respectively, except that the fair values of certain items identifiable in Scott's inventory were USD10,000 more than their carrying amounts. These items were still on hand at December 31, Year 1.3.During Year 1, Purl and Scott paid cash dividends of USD100,000 and USD30,000, respectively. For tax purposes, Purl receives the 100% exclusion for dividends received from Scott.4.There were no intercompany transactions, except for Purl's receipt of dividends from Scott and Purl's recording of its share of Scott's earnings.5.Both Purl and Scott paid income taxes at the rate of 30%.6.During Year 1, there was no impairment of goodwill.In the December 31, Year 1 consolidated financial statements of Purl and its subsidiary, total retained earnings should be:

A USD985,000 B USD765,000 C USD825,000 D USD795,000

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9 .Sayon Co. issues 200,000 shares of USD5 par value common stock to acquire Trask Co. in an acquisition-business combination. The market value of Sayon's common stock is USD12. Legal and consulting fees incurred in relationship to the purchase are USD110,000. Registration and issuance costs for the common stock are USD35,000. What should be recorded in Sayon's additional paid-in capital account for this business combination?

A USD1,365,000 B USD1,400,000 C USD1,545,000 D USD1,255,000

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10 .Selected information from the separate and consolidated balance sheets and income statements of Pare, Inc. and its subsidiary, Shel Co., as of December 31, Year 1, and for the year then ended is as follows:PareShelConsolidatedBalance sheet accountsAccounts receivableUSDUSD52,000USDUSD38,000USDUSD78,000Inventory60,00050,000104,000Income statement accountsRevenues400,000280,000616,000Cost of goods sold300,000220,000462,000Gross profitUSD100,000USD60,000USD154,000Additional information: During Year 1, Pare sold goods to Shel at the same markup on cost that Pare uses for all sales.What was the amount of intercompany sales from Pare to Shel during Year 1?

A USD58,000 B USD 6,000 C USD12,000 D USD64,000

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