Assignment A - Plagiarism Free

profilegwcthe
acquisition_2.xlsx
Home>Business & Finance homework help>Accounting homework help>Assignment A - Plagiarism Free

Q1

Parent Company Balance Sheet Sub Company Balance Sheet Question 1: A 100% asset acquisition of Sub Company by Parent Company (using cash and a bond issue) would most likely require which of the following?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) Minority Interest
Cash $250,000 Cash $40,000 $40,000 b) CR - Inventory $105,000
AR $30,000 AR $15,000 $10,000 c) CR - Common Stock $100,000
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q2

Parent Company Balance Sheet Sub Company Balance Sheet Question 3: A 100% stock acquisition of Sub Company by Parent Company (via Parent Stock Issues) would require which of the following?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) DR - Investment in Sub Company
Cash $250,000 Cash $40,000 $40,000 b) CR - Investment in Sub Company
AR $30,000 AR $15,000 $10,000 c) DR - Common Stock
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q3

Parent Company Balance Sheet Sub Company Balance Sheet Question 3: If the 100% stock acquisition of Sub Company by Parent Company was a bargain purchase, what was the purchase price of Sub Company?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) $650,000
Cash $250,000 Cash $40,000 $40,000 b) $600,000
AR $30,000 AR $15,000 $10,000 c) $550,000
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q4

Parent Company Balance Sheet Sub Company Balance Sheet Question 4: If the 100% stock acquisition of Sub Company by Parent Company was a bargain purchase, which of the following accounts are most likely to appear in a related journal entry?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) Goodwill
Cash $250,000 Cash $40,000 $40,000 b) Gain
AR $30,000 AR $15,000 $10,000 c) Bargain Purchase
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q5

Parent Company Balance Sheet Sub Company Balance Sheet Question 5: If the 100% stock acquisition of Sub Company by Parent Company resulted in the appearance of Goodwill on the Parent balance sheet, what is the amount amount most likely paid by Parent to acquire Sub Company?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) $750,000
Cash $250,000 Cash $40,000 $40,000 b) $600,000
AR $30,000 AR $15,000 $10,000 c) $550,000
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q6

Parent Company Balance Sheet Sub Company Balance Sheet Question 6: What type of business combination would result from Parent Company acquiring Sub Company to form Super-Parent Company?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) Statutory Merger
Cash $250,000 Cash $40,000 $40,000 b) Statutory Consolidation
AR $30,000 AR $15,000 $10,000 c) Stock Acquisition
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q7

Parent Company Balance Sheet Sub Company Balance Sheet Question 7: Sub Company was a former business activity segment of Parent Company. Parent Company shares were exchanged for Sub Company shares. This can best be described as which of the following?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) External Expansion
Cash $250,000 Cash $40,000 $40,000 b) Internal Expansion
AR $30,000 AR $15,000 $10,000 c) Statutory Merger
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q8

Parent Company Balance Sheet Sub Company Balance Sheet Question 8: Sub Company was a former business activity segment of Parent Company. Sub Company shares were issued to Parent Company shareholders. This can best be described as which of the following?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) External Expansion
Cash $250,000 Cash $40,000 $40,000 b) Internal Expansion
AR $30,000 AR $15,000 $10,000 c) Statutory Merger
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q9

Parent Company Balance Sheet Sub Company Balance Sheet Question 9: Parent Company acquired 10% interest in Sub Company. Which of the following describes the ownership interest of Parent Companyover Sub Company?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) Control
Cash $250,000 Cash $40,000 $40,000 b) Significant Influence
AR $30,000 AR $15,000 $10,000 c) Insignificant Interest
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000

Q10

Parent Company Balance Sheet Sub Company Balance Sheet Question 10: Parent Company acquired 30% interest in Sub Company. Which of the following describes the ownership interest of Parent Companyover Sub Company?
Assets, Liabilities & Equities Book Value Assets, Liabilities & Equities Book Value Fair Value a) Control
Cash $250,000 Cash $40,000 $40,000 b) Significant Influence
AR $30,000 AR $15,000 $10,000 c) Insignificant Interest
Inventory $150,000 Inventory $105,000 $200,000 d) None of the above
Land $100,000 Land $60,000 $100,000 Answer:
Plant and Equipment $600,000 Plant and Equipment $400,000 $300,000 Explanation of answer is written below
Less: Accumulated Depreciation -$150,000 Less: Accumulated Depreciation -$150,000
Total Assets $980,000 Goodwill $10,000
AP $20,000 Total Assets $480,000 $650,000
Common Stock $100,000 AP $50,000 $50,000
Additional Paid In Capital $560,000 Common Stock $100,000
Retained Earnings $300,000 Additional Paid In Capital $60,000
Total Liabilities & Equity $980,000 Retained Earnings $270,000
Total Liabilities & Equity $480,000