Parent acquired 100% of Sub. In the process they paid $45 for advice from a CPA firm.
Question:
Parent acquired 100% of Sub. In the process they paid $45 for advice from a CPA firm. The also guaranteed the former owners an amount based on future earnings. The expected value of that payment is $100, and the present value is $76. These two items will increase Investment in Sub on Parent's books by $:?
Parent acquired 100% of Sub by issuing shares in Parent. Parent pays $100 to register those shares. What effect does this have on the Parent's books:
The recognition of a liability.
An increase in acquisition expenses.
A decrease in Parent's paid-in capital.
An increase in Investment in Sub.
Parents acquires 100% of Sub on 1/1/20x1 for $500 in cash only. The following is true of the balance of Investment in Sub on the Parent's book on 1/1/20x1:
The balance will be $500 or less.
The balance will be $500 or more.
The balance will be $500 exactly.
The balance will be different depending on whether Parent uses cost or equity.
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso