4 Accounting Multiple Choice Problems (Simple)

Question 1 [1 point} Jessup Corp. will acquire a controlling stake in the outstanding shares of Parasol Inc. for $9.2 million in cash. Assuming the fair value of Parasol's net-assets is $12.5 million, and Jessup acquired a 35% share. goodwill can be calculated as Oa} $1?5. Ob} $1?5,E negative 0 c} seasons 0 a} nil Question 2 {1 point} Kieroy Inc. purchased a building for $B on January 1r moo. At the time of acquisition. the building had an estimated residual value of [SEEDLDD and an estimated useful life of twenty yea rs. The company has recorded monthly depreciation using the straight-line method. On January 1, 2010. it is decided to put the building up for sale at the price of $1,2. Assume all the criteria for a held for sale asset have been meL At December 31, 20112], the building is still for sale. The correct depreciation to record for 2:313 is Oa} saspoo Ob} nil 0c} $4o,ooo Question 3 (1 point) Consider an asset that was separated into its main components (A, B and C). The $1,200,000 purchase price was allocated to these components in equal proportions. The useful lifes are 12, 4, and 7 years for components A, B and C respectively. Neither of the components (except for component C for which a $18,000 value is anticipated) is expected to have a residual value. Assuming straight-line depreciation, total annual depreciation expense relating to these assets is (a) $125,120 Ob) $190,476 Oc) $100,000 Od) $187,905 Question 4 (1 point) When calculating impairment and using the rational entity model, which of the following is NOT correct? O If the recoverable amount > carrying amount, there is no impairment loss O) If the recoverable amount