Consolidated Financial Statements
Textbook Exam Questions
Course Introduction
This course provides an in-depth exploration of the principles and practices of preparing consolidated financial statements, focusing on the accounting and reporting requirements for group companies. Students will learn how to account for business combinations, including the acquisition of subsidiaries, associates, and joint ventures, in accordance with relevant International Financial Reporting Standards (IFRS) or local GAAP. Topics include the elimination of intercompany transactions and balances, calculation and allocation of goodwill, measurement of non-controlling interest, and the complexities of step acquisitions and disposals. Through theoretical instruction and practical case studies, students will develop the skills necessary to accurately prepare and interpret consolidated accounts for a range of organizational structures.
Recommended Textbook
Fundamentals of Advanced Accounting 7th Edition by Joe Ben Hoyle
Available Study Resources on Quizplus 12 Chapters
1194 Verified Questions
1194 Flashcards
Source URL: https://quizplus.com/study-set/3581
Page 2
Chapter 1: The Equity Method of Accounting for Investments
Available Study Resources on Quizplus for this Chatper
121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/71118
Sample Questions
Q1) Jarmon Company owns twenty-three percent (23%)of the voting common stock of Kaleski Corp.Jarmon does not have the ability to exercise significant influence over the operations of Kaleski.What method should Jarmon use to account for its investment in Kaleski?
Answer: The fair-value method should be used.Generally,ownership of more than twenty percent (20%)of the voting common stock would be presumed to carry significant influence and would require use of the equity method.The equity method is not appropriate in this case because of the lack of the ability to exercise significant influence.
Q2) What was the reported balance of Harley's Investment in Bike Co.at December 31,2018?
A)$2,400,000.
B)$2,480,000.
C)$2,500,000.
D)$2,600,000.
E)$2,680,000. Answer: E
Q3) What amount of equity income would Steven have recognized in 2018 from its ownership interest in Nicole?
Answer: [($120,000 × .4)- $12,000 - $840 + $1,500] = $36,660
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Consolidation of Financial Information
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/71114
Sample Questions
Q1) Which of the following statements is true regarding a statutory consolidation?
A)The original companies dissolve while remaining as separate divisions of a newly created company.
B)Both companies remain in existence as legal corporations with one corporation now a subsidiary of the acquiring company.
C)The acquired company dissolves as a separate corporation and becomes a division of the acquiring company.
D)The acquiring company acquires the stock of the acquired company as an investment.
E)A statutory consolidation is no longer a legal option.
Answer: A
Q2) What is the difference in consolidated results between a business combination whereby the acquired company is dissolved,and a business combination whereby separate incorporation is maintained?
Answer: There is no difference in consolidated results.
Q3) Determine the balance for Goodwill that would be included in a December 1,2017,consolidation.
Answer: 11ee3f35_34d2_a2a2_a6ca_fb8a80252481_TB4173_00
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter
3: Consolidations - Subsequent to the Date of Acquisition
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/71113
Sample Questions
Q1) What was consolidated equipment as of December 31,2018?
Answer: \[\begin{array} { l r }
\text { Equpment balance - Jaynes Inc. } & \$ 600,000 \\
\text { Equipment balance - Aaron Co. } & 360,000 \\
\text { Allocation based an fair value (fom above) } & 6,000 \\
\text { Amortization for } 2017 - 2018 ( \$ 1,200 \times 2 ) & ( 2,400 ) \\
\text { Consolidated equipment - December 31,2018 } & \$ 963.600 \end{array}\]
Q2) Compute the amount of Hurley's land that would be reported in a December 31,2018,consolidated balance sheet.
A)$ 900.
B)$1,300.
C)$ 400.
D)$1,450.
E)$2,200. Answer: B
Q3) What was consolidated net income for the year ended December 31,2018?
Answer: 11ea86f8_4aa6_8616_8084_993cdf66b9a1_TB4173_00
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Consolidated Financial Statements and Outside Ownership
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/71112
Sample Questions
Q1) What amount should have been reported for the land in a consolidated balance sheet at the acquisition date?
A)$ 52,500.
B)$ 70,000.
C)$ 75,000.
D)$ 92,500.
E)$100,000.
Q2) Compute Pell's Investment in Demers account balance at December 31,2019.
A)$580,000.
B)$574,400.
C)$548,000.
D)$542,400.
E)$541,000.
Q3) Compute Pell's income from Demers for the year ended December 31,2020.
A)$90,400.
B)$89,000.
C)$50,400.
D)$56,000.
E)$96,000.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Q4) Where should a noncontrolling interest appear on a consolidated balance sheet?
Chapter 5: Consolidated Financial Statements Intra-Entity
Asset Transactions
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/71111
Sample Questions
Q1) Assuming there are no excess amortizations or other intra-entity transactions,compute income from Stark reported on Parker's books for 2019.
A)$204,300.
B)$202,500.
C)$193,500.
D)$191,700.
E)$198,000.
Q2) Justings Co.owned 80% of Evana Corp.During 2018,Justings sold to Evana land with a book value of $48,000.The selling price was $70,000.For purposes of the December 31,2018 consolidated financial statements,at what amount should the land be reported?
A)$17,600.
B)$22,000.
C)$48,000.
D)$56,000.
E)$70,000.
Q3) What is the purpose of the adjustments to depreciation expense within the consolidation process when there has been an intra-entity transfer of a depreciable asset?
Q4) What is consolidated net income for 2018?
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Variable Interest Entities, Intra-Entity Debt,
Consolidated Cash Flows, and Other Issues
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/71110
Sample Questions
Q1) What is the amount of goodwill resulting from this acquisition?
Q2) Which of the following is not a factor that indicates a business enterprise that establishes a variable interest entity (VIE)should consolidate such VIE with its own financial statements?
A)The business enterprise establishing a VIE has the obligation to absorb potentially significant losses of the VIE.
B)The business enterprise establishing a VIE receives risks and rewards of the VIE in proportion to equity ownership.
C)The business enterprise establishing a VIE has the right to receive potentially significant benefits of the VIE.
D)The business enterprise establishing a VIE has power through voting rights to direct the entity's activities that significantly impact economic performance.
E)The business enterprise establishing a VIE is a primary beneficiary for the VIE.
Q3) When a company has preferred stock in its capital structure,what amount should be used to calculate noncontrolling interest in the preferred stock of the subsidiary when the company is acquired as a subsidiary of another company?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/71109
Sample Questions
Q1) How much US $ will it cost Brisco to finally pay the payable on June 7?
A)$1,666,667.
B)$2,440,000.
C)$2,520,000.
D)$2,500,000.
E)$2,400,000.
Q2) What amount will Coyote Corp.report in its 2018 balance sheet for Inventory?
Q3) Authoritative literature provides guidance for hedges of the following sources of foreign exchange risk.
I.Recognized foreign currency denominated assets and liabilities.
II.Unrecognized foreign currency firm commitments.
III.Forecasted foreign currency denominated transactions.
A)I only
B)I and II
C)II only
D)II and III
E)I,II,and III
Q4) What happens when a U.S.company sells goods denominated in a foreign currency and the foreign currency depreciates?
Q5) How is the fair value of a Forward Contract determined by U.S.GAAP?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Translation of Foreign Currency Financial
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/71108
Sample Questions
Q1) Assume the functional currency is the Euro;compute the U.S.balance sheet amount for accumulated depreciation for 2018.
A)$40,950.
B)$41,850.
C)$45,450.
D)$42,750.
E)$44,100.
Q2) Amortization of the patent,translated,for 2018 would be
A)$ 7,000.
B)$10,000.
C)$ 6,800.
D)$ 9,000.
E)$ 6,500.
Q3) Under the current rate method,inventory at net realizable value would be translated for the balance sheet at what rate?
A)Beginning of the year rate.
B)Average rate.
C)Current rate.
D)Historical rate.
E)Composite amount.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Partnerships: Formation and Operation
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/71107
Sample Questions
Q1) What is the balance of Donald's capital account after the new partnership is created?
A)$ 84,000.
B)$100,000.
C)$140,000.
D)$176,000.
E)$200,000.
Q2) What was the remainder portion of net income allocated to Nolan for 2018?
A)$45,440.
B)$58,040.
C)$70,040.
D)$72,000.
E)$82,040.
Q3) What was Young's total share of net loss for the first year?
A)$ 3,900 loss.
B)$11,700 loss.
C)$10,400 loss.
D)$24,700 loss.
E)$ 9,100 loss.
Q4) Determine the amount of net income allocated to each partner for 2017.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Partnerships: Termination and Liquidation
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/71117
Sample Questions
Q1) Prepare the schedule to compute the cash payments to the partners.
Q2) Determine the cash to be retained and prepare a schedule to distribute $35,000 cash to the partners.
Q3) Assuming noncash assets were sold for $60,000,how much will each partner receive in the liquidation?
\(\begin{array} { ccc}
&& \text { Keatan } & \text { Lewis } & \text { Meadar } \\\end{array}\)
A) \(\begin{array} { ccc} & \$ 40,000 & \$ 26,667 & \$ 53,333 \\\end{array}\)
B) \(\begin{array} { ccc} & \$ 24,000 & \$ 48,000 & \$ 48,000 \\\end{array}\)
C) \(\begin{array} { ccc} & \$ 56,667 & \$ 100 & &\$ 53,333 \\\end{array}\)
D)\(\begin{array} { ccc} & \$ \quad 0 &&\$ 100 &&& \$ 120,000 \\\end{array}\)
E) \(\begin{array} { ccc} & \$ 36,000 & \$ 12,000 & \$ 72,000 \\ \end{array}\)
Q4) If the noncash assets are sold for $105,000,what would be the maximum amount of cash that Canton could expect to receive?
Q5) What should occur when a solvent partner has a deficit balance?
Q6) How much cash should each partner receive at this time,pursuant to a proposed schedule of liquidation?
Q7) What is a safe cash payment?
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Accounting for State and Local Governments,
part I
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/71116
Sample Questions
Q1) In May of 2018,the Town of Anthrop receives a $60,000 grant restricted for transporting all senior citizens to polling locations on Election Day in November of 2018.
Required:
Prepare the journal entry,and identify the fund in which it is recorded,to record the receipt of the grant.
Q2) The City of Kamen collected $17,000 from parking meters that must be transferred to the county government in the next thirty days.
Required:
For fund financial statements,prepare the journal entry for the collection of the $17,000 from parking meters,including the fund type in which the entry would have been recorded.
Q3) Which of the following is not one of the categories for reporting fund balances of governmental funds?
A)Spendable
B)Nonspendable
C)Assigned
D)Unassigned
E)Restricted
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Accounting for State and Local Governments, part II
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/71115
Sample Questions
Q1) What is the highest level of authoritative rules for state and local government accounting?
A)Technical Bulletins
B)Implementation Guides
C)Official Statements of GASB
D)Interpretations no longer in effect
E)Financial Accounting Standards
Q2) According to the GASB (Governmental Accounting Standards Board),which one of the following is not a criterion for determining whether a government is legally separate?
A)The government can determine its own budget.
B)The government can issue bonded debt.
C)The government has corporate powers including the right to sue and be sued.
D)The government has the power to levy taxes.
E)The government can issue preferred stock.
Q3) Determine and prepare the journal entries for the City of Wetteville,in the general fund,on the dates mentioned for each lettered item,for the purposes of preparing the fund financial statements.
Q4) What is meant by the term legally independent?
Q5) What are the three broad sections of a state or local government's CAFR?
To view all questions and flashcards with answers, click on the resource link above. Page 14