1) On June 1, 2014. Pucll Company acquired l00% ofthc stock of Sortcll Inc. On this date. Pucll had Retained Earnings of $100,000 and Sorrcll had Retained Earnings of $50,000. On December 3]. 20M. Pucll had Rcmincd Earnings of5120.000 and Sorrel! had Retained Earnings of560.000. 11m amount of Retained Earnings tho! nppcanzd in the December 31, 2014 consolidated balance sheet was

A) $130,000.

8) $120,000.

C) 3170.000.

D) $180,000.

2) A newly acquired subsidiary had pwcxisting goodwill on its books. The parent company's consolidated balance sheet will

A) Not show any value for the subsidiary's pre-cxisting goodwill.

B) Not show any value for the pre-existing goodwill unless all other assets of the subsidiary are stated at their full fair value.

C) Treat the goodwill similarly to other intangible assets of the acquired company.

D) Always show the preoexisting goodwill of the subsidiary at its book value.

3) On January l, 2014, Packaging lntemational purchased 90% of Shipaway Corporation's outstanding shares for Sl35.000 when the fair value of Shipaway's net assets were equal to the book values. The balance sheets of Packaging and Shipaway Corporations at year-end 2013 are summarized as follows:

If a consolidated balance sheet was prepared immediately after the business combination, the non-controlling interest would be

A) $16,667.

4) 815,000.

C) $13.500.

D) $9.000.

Transcribed Image Text:

Assets Liabilities Capital stock Retained earnings Packaging Shipaway $590,000 $180,000 $70,000 360,000 160,000 $30,000 90,000 60,000 Assets Liabilities Capital stock Retained earnings Packaging Shipaway $590,000 $180,000 $70,000 360,000 160,000 $30,000 90,000 60,000

Answer rating: 100% (QA)

1 B 120000 Reason The amount of retained earnings as on 31st December 2014 in the consolidated balan... View the full answer