江西财经大学高级财务会计国际学院题库chapter_09

1Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallAdvancedAccounting,11e(Beams/Anthony/Bettinghaus/Smith)Chapter9IndirectandMutualHoldingsMultipleChoiceQuestions1)PalletCorporationowns80%ofAdeltCorporationandAdeltowns60%ofBajoInc.Whichofthefollowingiscorrect?A)Bajoshouldnotbeconsolidatedbecausenoncontrollinginterestshold52%.B)Bajoshouldbeconsolidatedbecausethe60%ofBajostockisheldintheaffiliatestructure.C)Pallethas8%indirectownershipofBajo.D)Pallethas80%indirectownershipofBajo.Answer:BObjective:LO1Difficulty:Moderate2)PageCorporationacquireda60%interestinAceCorporationataprice$40,000inexcessofbookvalueandfairvalueonJanuary1,2010.Onthesamedate,Aceacquireda70%interestinBaderCorporationataprice$30,000inexcessofbookvalueandfairvalue.TheexcesspurchasecostpaidbyPageandAcewasattributedtogoodwill.Separatenetincomes(excludinginvestmentincome)forthethreeaffiliatesfor2010areasfollows:Page,$500,000,Ace,$300,000,andBader,$400,000.Page'scontrollinginterestshareofconsolidatednetincomefor2010isA)$808,000.B)$848,000.C)$920,000.D)$960,000.Answer:BObjective:LO1Difficulty:ModerateUsethefollowinginformationtoanswerthequestion(s)below.PaintCorporationowns82%ofAchilleCorporationandAchilleCorporationowns80%ofBadrackCorporation.Forthecurrentyear,theseparatenetincomes(excludinginvestmentincome)ofPaint,Achille,andBadrackare$120,000,$100,000,and$50,000,respectively.Thecostofeachinvestmentwasequaltothebookvalueoftheinvestment,whichwasalsoequaltothefairvalue.3)NoncontrollinginterestshareforBadrackisA)$9,000.B)$10,000.C)$20,000.D)$40,000.Answer:BExplanation:B)(0.20×$50,000=$10,000)Objective:LO1Difficulty:Moderate2Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHall4)NoncontrollinginterestshareforAchilleisA)$18,000.B)$25,200.C)$36,200.D)$72,000.Answer:BExplanation:B)[$100,000+(0.80)×($50,000)]×18%=$25,200Objective:LO1Difficulty:Moderate5)ControllinginterestshareofconsolidatednetincomeforPaintCorporationandSubsidiariesis:A)$234,800.B)$244,800.C)$260,000.D)$270,000.Answer:AExplanation:A)PaintAchilleBadrackSeparateincomes$120,000$100,000$50,000Allocate80%ofBadracktoAchille_______40,000(40,000)Subtotal120,000140,00010,000Allocate82%ofAchilletoPaint114,800(114,800)Controllinginterestshareofcons.netincome$234,800______________Noncontrollinginterestshare$25,200$10,000Objective:LO1Difficulty:Moderate3Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHall6)PabariCorporationownsan80%interestinAldersCorporationandAldersownsa60%interestinBabaoCorporation.Bothinterestswereacquiredatacostequaltobookvalueequaltofairvalue.During2010,AlderssellslandtoBabaoataprofitof$12,000.BabaostillholdsthelandatDecember31,2010.Netincome(loss)ofthethreecompanies(excludinginvestmentincome)for2010are:PabariCorporation$180,000AldersCorporation72,000BabaoCorporation(30,000)Controllinginterestshareofconsolidatednetincomeandnoncontrollinginterestshare,respectively,for2010areA)$211,200and($1,200).B)$211,200and($3,600).C)$213,600and($1,200).D)$213,600and($3,600).Answer:DExplanation:D)Noncont.interestshare:$8,400Profit+($12,000)LossPabariAldersBabaoSeparateincomes$180,000$72,000$(30,000)Less:Unrealizedprofitonland_______(12,000)_______Subtotal$180,000$60,000(30,000)AllocateBabao'snetlosstoAlders($30,000)×60%_______(18,000)18,000Subtotal180,00042,000(12,000)Allocate80%ofAldersincometoPabari33,600(33,600)Controllinginterestshareofconsolidatednetincome$213,600______________Noncontrollinginterestshare$8,400$12,000Objective:LO1Difficulty:Moderate4Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHall7)PabloCorporationacquired60%ofAbagiaCorporationonJanuary1,2010,atacostof$20,000inexcessofbookvalue.Also,onJuly1,2010,Pabloacquired60%ofBabinCorporationatbookvalue.OnJanuary1,2011,Abagiaacquireda20%interestinBabinatacostof$10,000inexcessofbookvalue.TheexcesspurchasecostspaidbyPabloandAbagiawereattributedtogoodwill.OnJuly1,2011,Pablosoldlandwithabookvalueof$20,000toAbagiafor$40,000.The$20,000unrealizedgainisincludedinPablo'sseparateincome.Separatenetincomesfortheaffiliatedcompanies(excludinginvestmentincome)for2011are:Pablo$250,000Abagia70,000Babin100,000Controllinginterestshareofconsolidatednetincomefor2011isA)$304,000.B)$324,000.C)$344,000.D)$364,000.Answer:CExplanation:C)PabloAbagiaBabinSeparateincomes$250,000$70,000$100,000Less:Unrealizedprofitonland(20,000)________________Separaterealizedincomes$230,000$70,000$100,000AllocateBabin'sincome:60%toPablo60,000(60,000)20%toAbagia________20,000(20,000)Subtotal290,00090,00020,000AllocateAbagia'snetincome60%toPablo54,000(54,000)Controllinginterestshareofconsolidatednetincome$344,000________________Noncontrollinginterestshare$36,000$20,000Objective:LO1Difficulty:Moderate5Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHall8)PagliaCorporationowns80%ofAburnCorporationandhasseparatenetincomeof$200,000for2010.AburnCorporationhasseparatenetincomeof$100,000andowns70%oftheoutstandingstockofBadleyCorporation.BadleyCorporationhasseparatenetincomeof$80,000.(Separatenetincomesexcludeinvestmentincome.)Thecostofeachinvestmen