Question 1

What was the total for consolidated patents as of December 31, 2018?

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Question 2

Matthews Co.acquired all of the common stock of Jackson Co.on January 1, 2017.As of that date, Jackson had the following trial balance:
During 2017, Jackson reported net income of $96,000 while paying dividends of $12,000.During 2018, Jackson reported net income of $132,000 while paying dividends of $36,000.
Assume that Matthews Co.acquired the common stock of Jackson Co.for $588,000 in cash.As of January 1, 2017, Jackson's land had a fair value of $102,000, its buildings were valued at $188,000, and its equipment was appraised at $216,000.Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 10 years.
Matthews decided to use the equity method for this investment.
Required:
(A.) Prepare consolidation worksheet entries for December 31, 2017.
(B.) Prepare consolidation worksheet entries for December 31, 2018.

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Question 3

What balance would Jaynes' Investment in Aaron Co.account have shown on December 31, 2018, when the equity method was applied for this acquisition?

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Question 4

Compare the differences in accounting treatment for goodwill between U.S.GAAP and IFRS.

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Question 5

How is the goodwill impairment process simplified for private companies?

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Question 6

If the parent's net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2018?

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Question 7

On January 1, 2016, Rand Corp.issued shares of its common stock to acquire all of the outstanding common stock of Spaulding Inc.Spaulding's book value was only $140,000 at the time, but Rand issued 12,000 shares having a par value of $1 per share and a fair value of $20 per share.Rand was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on Spaulding's records by $60,000 while equipment (five-year life) was undervalued by $25,000.Any consideration transferred over fair value of identified net assets acquired is assigned to goodwill.
Following are the individual financial records for these two companies for the year ended December 31, 2019.
  Required:
Prepare a consolidation worksheet for this business combination.

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Question 8

Determine the amortization expense related to the combination at the year-end date of 12/31/16.

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Question 9

Which of Pritchett's reporting units require both steps to test for goodwill impairment?

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Question 10

If the parent's net income reflected use of the equity method, what were the consolidated retained earnings on December 31, 2018?

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Question 11

How much goodwill impairment should Pritchett report for 2018?

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Question 12

Hanson Co.acquired all of the common stock of Roberts Inc.on January 1, 2017, transferring consideration in an amount slightly more than the fair value of Roberts' net assets.At that time, Roberts had buildings with a twenty-year useful life, a book value of $600,000, and a fair value of $696,000.On December 31, 2018, Roberts had buildings with a book value of $570,000 and a fair value of $648,000.On that date, Hanson had buildings with a book value of $1,878,000 and a fair value of $2,160,000.
Required:
What amount should be shown for buildings on the consolidated balance sheet dated December 31, 2018?

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Question 13

Private companies, with respect to goodwill:
A) May elect to amortize it over a period of 15 years.
B) Must treat it as an intangible asset with an indefinite life.
C) Must amortize it over a 12-year period.
D) May amortize goodwill if the value of the company does not exceed $10 million.
E) May treat goodwill as a definite lived intangible asset with a 10-year useful life.

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A) May...

Question 14

For each of the following situations, select the best answer that applies to consolidating financial information subsequent to the acquisition date:
(A) Initial value method.
(B) Partial equity method.
(C) Equity method.
(D) Initial value method and partial equity method but not equity method.
(E) Partial equity method and equity method but not initial value method.
(F) Initial value method, partial equity method, and equity method.
.Method(s) available to the parent for internal record-keeping.
_____2.Easiest internal record-keeping method to apply.
_____3.Income of the subsidiary is recorded by the parent when earned.
_____4.Designed to create a parallel between the parent's investment accounts and changes in
the underlying equity of the acquired company.
_____5.For years subsequent to acquisition, requires the *C entry.
_____6.Uses the cash basis for income recognition.
_____7.Investment account remains at initially recorded amount.
_____8.Dividends received by the parent from the subsidiary reduce the parent's investment
account.
_____9.Often referred to in accounting as a single-line consolidation.
.Increases the investment account for subsidiary earnings, but does not decrease the
subsidiary account for equity adjustments such as amortizations.

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Question 15

What was consolidated net income for the year ended December 31, 2018?

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Question 16

Determine the amortization expense related to the consolidation at the year-end date of 12/31/24.

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Question 17

On January 1, 2017, Jumper Co.acquired all of the common stock of Cable Corp.for $540,000.Annual amortization associated with the acquisition amounted to $1,800.During 2017, Cable recognized net income of $54,000 and paid dividends of $24,000.Cable's net income and dividends for 2018 were $86,000 and $24,000, respectively.
Required:
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 2018.

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Question 18

If Utah paid $300,000 in cash for Trimmer, what allocation and amortization should have been assigned to the subsidiary's Building account and its Equipment account in a December 31, 2018 consolidation?

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Question 19

What was consolidated equipment as of December 31, 2018?

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Question 20

If the parent's net income reflected use of the partial equity method, what were the consolidated retained earnings on December 31, 2018?

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Quiz 3: Consolidations - Subsequent to the Date of Acquisition

What was the total for consolidated patents as of December 31, 2018?

What balance would Jaynes' Investment in Aaron Co.account have shown on December 31, 2018, when the equity method was applied for this acquisition?

Compare the differences in accounting treatment for goodwill between U.S.GAAP and IFRS.

How is the goodwill impairment process simplified for private companies?

If the parent's net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2018?

Determine the amortization expense related to the combination at the year-end date of 12/31/16.

Which of Pritchett's reporting units require both steps to test for goodwill impairment?

If the parent's net income reflected use of the equity method, what were the consolidated retained earnings on December 31, 2018?

How much goodwill impairment should Pritchett report for 2018?

Private companies, with respect to goodwill:

What was consolidated net income for the year ended December 31, 2018?

Determine the amortization expense related to the consolidation at the year-end date of 12/31/24.

If Utah paid $300,000 in cash for Trimmer, what allocation and amortization should have been assigned to the subsidiary's Building account and its Equipment account in a December 31, 2018 consolidation?

What was consolidated equipment as of December 31, 2018?

If the parent's net income reflected use of the partial equity method, what were the consolidated retained earnings on December 31, 2018?