Advance Accounting

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Read chapter (see attachment) answer the problems listed below.

Problem numbers from attachment: 3, 7, 10, 15, 16, 17, 18, 22, 30

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Explanation & Answer

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Running Head: Advanced Accounting

1

Advanced Accounting
Institutional Affiliation
Date

Advanced Accounting

2
Question 3

Statutory merger
A business combination in which only one company continues to exist as a legal entity.
Question 7
Answer
When bargain purchase occurs
Question 10
Answer
The parent ignores preexisting subsidiary goodwill and allocates the subsidiary’s fair value
among the separately identifiable assets acquired and liabilities assumed.
Question 15
Consideration transferred = issued common stock × fair value
Consideration transferred = 10,000 × $40 = $400,000
Book value of subsidiary = assets – liabilities
Book value of subsidiary = (60,000 + 145,000 + 180,000 +200,000 + 75,000) – (360,000)
Book value of subsidiary = 300,000
Consideration transferred
Book value of subsidiary
Fair value in excess of book value
Less: Allocation of excess fair over book
value identified with specific accounts:
Inventory

$400,000
($300,000)
$100,000

30,000

Advance...

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