7/25/2019 Advanced Accounting 2 Quizzer
1/1
Quiz in Business CombinationSubsequent to Date of
Acquisition
Name: _________________________ Date:__________
Score:__________
Problem I. On January 1, 2014, Dad Company !"c! !a#e an
out$tand"n% common $toc& o'2,400,000 and reta"ned earn"n%$ o'
1,20(,000 pr"or to comb"nat"on, purc!a$ed )(* o' +abyCompany 'or
P1,(00,000 ca$!. On t!e date o' acu"$"t"on, +aby Company reported
common$toc& out$tand"n% o' 1,-00,000 and reta"ned earn"n%$ o'
200,000. !e boo& #alue re/ect$ t!e'a"r #alue o' a$$et$ and
l"ab"l"t"e$ ecept 'or a patent o' +aby "t! an econom"c l"'e o' #e
year$
"$ under$tated by 1(0,000 and an eu"pment "t! rema"n"n% u$e'ul
l"'e o' ten year$, "$o#er$tated by (0,000.!e 'ollo"n% data
$ummar"ed t!e re$ult$ o' t!e"r nanc"al operat"on 'or 2014 and
201(:
2014 201(Dad Co. +aby Co. Dad Co. +aby Co.
Sale$1,2(0,00
0((0,000 1,-00,000 4(0,000
D"#"dend Income 'rom+aby
(0,000
340,000
3
otal Income1,-00,00
0((0,000 1,-40,000 4(0,000
Co$t o' Sale$ 3(0,000 3-10,000 351(,000 3-2(,000
6ro$$ Prot 4(0,000 240,000 42(,000 12(,000Operat"n% 7pen$e$
321(,000 31(0,000 310,000 380,000Net Income 2-(,000 50,000 24(,000
8(,000
Compute t!e 'ollo"n%:1. !e amount o' con$ol"dated CI
attr"butable to parent 'or 201492. NCI "n CI o' Sub$"d"ary 201(9-.
!e Con$ol"dated CI 'or 201494. !e Non3controll"n% "ntere$t "n +aby
Company 'or 20149(. !e Non3controll"n% "ntere$t "n +aby Company 'or
201(98. On December -1, 201(, Con$ol"dated reta"ned earn"n%$ $!ould
be9
Problem II. On June 1, 2014, Company acu"red 0* o' t!e
out$tand"n% #ot"n% $toc& o' +Company 'or 2,2(0,000. + Company
!a$ total $!are!older;$ eu"ty o' 1,00,000. !e boo& #aluere/ect$
t!e 'a"r mar&et #alue o' a$$et$ and l"ab"l"t"e$ ecept 'or land
"t! boo& #alue o' 800,000and 'a"r #alue o' )00,000, eu"pment
"t! rema"n"n% u$e'ul l"'e o' year$, "t! t!e 'a"r #alueeceed"n% t!e
boo& #alue by 58,000.
