What's your net worth?
Caution merging traffic
UOMe, IOU
Lost in translation
Creative Accounting
100
Where in the financial statements must the details of each class of stock be reported?
On the face of the balance sheet and disclosure notes.
100
What is the primary difference between recording an acquisition when the subsidiary is dissolved and when separate incorporation is maintained?
When the subsidiary is dissolved, the acquirer records in its books the fair value of individual assets and liabilities acquired as well as the resulting goodwill from the acquisition. However, when separate incorporation is maintained, the acquirer only records the total fair value of assets and liabilities acquired, as well as the resulting goodwill, in one account as an investment.
100
On April 7, 2011, Pate Corp. sold land to Shannahan Co., its subsidiary. From a consolidated point of view, when will the gain on this transfer actually be earned?
The gain is earned when Shannahan sells the land to a third party.
100
In translating a foreign subsidiary's financial statements, what exchange rate should be used for the subsidiary's revenues and expenses?
The historical rate that was in effect when the revenues and expenses were incurred should be used unless those revenues and expenses occur throughout the year, and then a weighted average exchange rate for the year may be used.
100
This singer and artist studied accounting at the London School of Economics before becoming the lead singer of the Rolling Stones.
Who is Mick Jaggar
200
What are the four components to Other Comprehensive Income?
Pension funded status changes, Unrealized G/L on SAS securities, Foreign Currency Translations, Effective portion of Cash Flow Hedges
200
How is goodwill determined using the acquisition method for a consolidation?
Consideration - Book Value
200
Parent Corporation loaned money to its subsidiary with a five-year note at the market interest rate. How would the note be accounted for in the consolidation process? (Please give the debit and credit of the entry)
The note would be eliminated in the consolidation process with an entry debiting Notes Payable and crediting Notes Receivable.
200
Farley Brothers, a U.S. company, had a subsidiary in Italy. Under what conditions would the U.S. dollar be the functional currency for this subsidiary?
To determine the subsidiary's functional currency, Farley Brothers should look at the volume of the subsidiary's transactions in various currencies. If most of the subsidiary's sales and purchases are in dollars, the dollar may be the logical choice for the functional currency. If there are many transactions between the subsidiary and the parent, and if most of the subsidiary's financing comes from the U.S., the dollar may be a better choice than the euro.
200
This famous saxophonist hit breakthrough success in 1986. Prior to his fame, he was an accounting major at the University of Washington.
Who is Kenny G
300
During the current year JET Industries issued 5 million of its $1 par common shares to its underwriters for $25,000,000 less promotional and accounting services of $500,000 to effect the issue. Prepare the journal entry to record the issuance of the shares.
Cash (25,000,000 - 500,000) 24,500,000 Common Stock (5 Million * $1) 5,000,000 APIC 19,500,000
300
Fine Co. issued its common stock in exchange for the common stock of Dandy Corp. in an acquisition. At the date of the combination, Fine had land with a book value of $480,000 and a fair value of $620,000. Dandy had land with a book value of $170,000 and a fair value of $190,000. What was the consolidated balance for Land in a consolidated balance sheet prepared at the date of the acquisition combination?
480,000 + 190,000 = 670,000
300
Tara Company owns 80 percent of the common stock of Stodd Inc. In the current year, Tara reports sales of $5,000,000 and cost of goods sold of $3,500,000. For the same period, Stodd has sales of $500,000 and cost of goods sold of $400,000. During the year, Stodd sold merchandise to Tara for $40,000 at a price based on the normal markup. At the end of the year, Tara still possesses 20 percent of this inventory. Prepare the consolidation entry to defer the unrealized gain.
CGS 1,600 Inventory 1,600
300
Where is the translation adjustment from translating a foreign subsidiary's financial statements shown on the parents financial statements?
As a component of equity specifically AOCI.
300
In this 2006 film, An IRS auditor suddenly finds himself the subject of narration only he can hear: narration that begins to affect his entire life, from his work, to his love-interest, to his death.
What is Stranger than fiction
400
What is the term that gives a shareholder the right to maintain a proportional ownership interest in the corporation?
Preemptive Right
400
On January 1, 2010, Jumper Co. acquired all of the common stock of Cable Corp. for $540,000. Annual amortization associated with the purchase amounted to $1,800. During 2010, Cable earned net income of $54,000 and paid dividends of $24,000. Cable's net income and dividends for 2011 were $86,000 and $24,000, respectively. Assuming that Jumper decided to use the partial equity method, prepare a schedule to show the balance in the investment account at the end of 2011.
Investment + Income - Dividends 540,000 + 54,000 + 86,000 - 24,000 - 24,000 = 632,000
400
Fraker, Inc. owns 90 percent of Richards, Inc. and bought $200,000 of Richards' inventory in 2011. The transfer price was equal to 30 percent of the sales price. When preparing consolidated financial statements, what amount of these sales is eliminated?
Regardless of the ownership percentage or the markup, the $200,000 was simply an intra-entity asset transfer for consolidation purposes. Thus, within the consolidation process, the entire $200,000 should be eliminated from both the Sales and the Purchases (Inventory) accounts.
400
Under the current rate method, retained earnings would be translated at what rate?
Composite Amount
400
This coach from the Ultimate Fighter (Season 1) and former light heavyweight UFC champion, graduated with a BA in Accounting in 1995.
Who is Chuck the iceman Liddell
500
The shareholders' equity of Tru Corporation includes $600,000 of $1 par common stock and $1,200,000 par value of 6% cumulative preferred stock. The board of directors of Tru declared cash dividends of $150,000 in 2013 after paying $60,000 cash dividends in each of 2012 and 2011. What is the amount of dividends common shareholders will receive in 2013?
Tru's common shareholders will receive dividends of $54,000 as a result of the 2013 distribution. * $72,000 current preference (6% x $1,200,000), thus $12,000 dividends in arrears. ** $72,000 current preference (6% x $1,200,000), thus another $12,000 dividends in arrears. *** $24,000 dividends in arrears plus the $72,000 current preference.
500
What accounting method requires a subsidiary to record acquisition fair value allocations and the amortization of allocations in its internal accounting records?
The appropriate method is termed push-down accounting.
500
Parent Corporation acquired some of its subsidiary's bonds on the open bond market. The remaining life of the bonds was eight years, and Parent expected to hold the bonds for the full eight years. How would the acquisition of the bonds affect the consolidation process?
In the consolidation process, the bonds would be treated as if they had been retired. A gain or loss would be recognized in the period in which they were acquired. Intra-entity interest revenue and expense would be eliminated.
500
On January 1, 2011, Fandu Corp. began operations of a foreign subsidiary. On April 1, 2011, the subsidiary purchased inventory costing 150,000 stickles. One-fourth of this inventory remained unsold at the end of 2011 while 40% of the liability from the purchase had not yet been paid. The pertinent indirect exchange rates were: January 1 $1 = 3.0 stickles April 1 $1 = 3.4 stickles Average $1 = 3.2 stickles December 31 $1 = 3.6 stickles What should have been the December 31, 2011 inventory balance for this foreign subsidiary assuming that the US dollar is the functional currency?
Inventory (150,000 * .25 * (1/3.6)) = 10,417
500
In this 1984 film, the possessed character of Louis Tully, CPA, refers to himself as the Keymaster. He spends the later portion of the film looking for the Gatekeeper.
What is Ghostbusters
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