True or False: Under ASC 805, a parent company is required to use the Entity Concept...
True or False:
Under ASC 805, a parent company is required to use the Entity Concept and fully revalue undervalued assets in consolidation.
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True or False:
Under ASC 805, a parent company is required to use the Entity
Concept...
"Consolidated Financial Statements – Intra-Entity Asset Transactions" The consolidation process required for the intra-entity transfer of...
"Consolidated Financial Statements – Intra-Entity Asset Transactions" The consolidation process required for the intra-entity transfer of depreciable assets is different from the requirements for inventory and land. Analyze the current consolidation process for intra-entity transfer of depreciable assets and suggest at least one (1) improvement to the process. Provide an example to support your recommendation. Assume that company P (parent) uses the equity method to account for its investment in company S (subsidiary). Company P purchases inventory items from company...
Recognition upon initial consolidation of a variable interest entity (VIE) when VIE is not a business...
Recognition upon initial consolidation of a variable interest entity (VIE) when VIE is not a business Assume that prior to January 1, 2019, a Reporting Company owned a 15 percent interest in a Legal Entity. The Reporting Company acquired its 15 percent ownership interest in the Legal Entity on June 15, 1998 for $45,000, and correctly accounted for this investment under the cost method (i.e., it was a passive investment and it was not marketable). On January 1, 2019, the...
Recognition upon initial consolidation of a variable interest entity (VIE) when VIE is a business Assume...
Recognition upon initial consolidation of a variable interest entity (VIE) when VIE is a business Assume that prior to January 1, 2016, a Reporting Company owned a 10 percent interest in a Legal Entity. The Reporting Company acquired its 10 percent ownership interest in the Legal Entity on June 15, 1995 for $20,000, and correctly accounted for this investment under the cost method (i.e., it was a passive investment and it was not marketable). On January 1, 2016, the Reporting...
The consolidation process required for the intra-entity transfer of depreciable assets is different from the requirements...
The consolidation process required for the intra-entity transfer of depreciable assets is different from the requirements for inventory and land. Analyze the current consolidation process for an intra-entity transfer of depreciable assets and suggest at least one (1) improvement to the process. Provide an example to support your recommendation. Assume that company P (parent) uses the equity method to account for its investment in company S (subsidiary). Company P purchases inventory items from company S. According to FASB’s guidance, the...
A company decides it is required to consolidate a special interest entity. The assets and liabilities...
A company decides it is required to consolidate a special interest entity. The assets and liabilities of that entity are consolidated at book value, and not revalued to fair value, when A. The company and the entity are already under common control. B. The company owns some of the stock of the entity. C. The company becomes the primary beneficiary of the entity. D. The entity is not previously under the control of the company.
On December 31, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for...
On December 31, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities. Inventory is undervalued $5,000. Land is undervalued $20,000. Buildings and equipment have a fair value which exceeds book value by $30,000. Bonds payable...
1.Under a consignment arrangement, revenue is not recognized until the consigned goods are sold to a...
1.Under a consignment arrangement, revenue is not recognized until the consigned goods are sold to a third party. True or False 2. Amounts received from the sale of gift cards should be recognized by the seller at the time of sale.--True or False 3. Ann Smith just saw her doctor. After the appointment, she was informed by the receptionist that the fee for the visit is $75 and that her insurance company will be billed for the visit. Ann was...
True/False 1.The taxable estate is similar to the equity concept of a balance sheet. It reflects...
True/False 1.The taxable estate is similar to the equity concept of a balance sheet. It reflects the FMV of all assets less the decedents liabilities and “estate loss from operations” 2. Exemption Portability was recently introduced in an effort to correct poor estate planning that often resulted from “sweetheart wills”. Effectively, in these cases, the first-to-die spouse’s Unified credit can be transferred to the surviving spouse. 3. For estate tax valuation propose, assets are always valued at fair market value...
TRUE/FALSE 1. When control is obtained through a stock acquisition, combined financial statements automatically result for...
TRUE/FALSE 1. When control is obtained through a stock acquisition, combined financial statements automatically result for future periods. 2. Tax loss carryovers are generally transferable in a business combination and may be recorded as an asset. 3. In all business combinations, one company gains control over the assets and liabilities of another company. 4. Regardless of the purchase price, the current assets, liabilities, and long-term investments (not including equity method investments) are recorded at fair market value in a business...
Inferring consolidation entries from consolidated financial statements—Cost method Assume a parent company acquired a subsidiary on...
Inferring consolidation entries from consolidated financial statements—Cost method Assume a parent company acquired a subsidiary on January 1, 2012. The purchase price was $1,312,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Original Amount Original Useful Life Property, plant and equipment (PPE), net $300,000 20 years Patent 432,000 12 years Goodwill 580,000 Indefinite $1,312,000 The parent company uses the cost method of...
TRUE/FALSE 1. When control is obtained through a stock acquisition, combined financial statements automatically result for future periods. 2. Tax loss carryovers are generally transferable in a business combination and may be recorded as an asset. 3. In all business combinations, one company gains control over the assets and liabilities of another company. 4. Regardless of the purchase price, the current assets, liabilities, and long-term investments (not including equity method investments) are recorded at fair market value in a business...
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