topic consolidated assets after acquisition lo 2 31 what amount of mahl 39 sbuilding 4314369

topic consolidated assets after acquisition lo 2 31 what amount of mahl 39 sbuilding 4314369

Topic: Consolidated Assets after Acquisition

LO: 2

31.What amount of Mahl'sbuilding would be included on the consolidated balance sheet at December 31, 2015?

a.  $360,000

b.  $405,000

c.  $324,000

d.  $288,000

Topic: Consolidated Assets after Acquisition

LO: 2

32.What amount of Mahl'sequipment would be included on the consolidated balance sheet at December 31, 2015?

a.  $225,000

b. $180,000

c.  $240,000

d.  $300,000

Topic: Consolidated Assets after Acquisition

LO: 2

33.What amount of Mahl'sland would be included on the consolidated balance sheet at December 31, 2015?

a. $270,000

b. $390,000

c. $120,000

d. $660,000

Topic: Consolidated Liabilities after Acquisition

LO: 2

34.What amount of Mahl'sBonds Payable would be included on the consolidated balance sheet at December 31, 2015?

a.  $520,000

b.  $507,500

c.  $530,000

d. $505,000

Rationale: Mahl'sBonds Payable would be included on the acquisition date consolidated balance sheet at $510,000 since this was its fair value at that date.  Annual premium amortization would be ($510,000 – 500,000) / 4 years = $2,500.  At December 31, 2015, the consolidated figure for Mahl's Bonds Payable would be computed as follows:  $510,000 – ($2,500 x 2 years) = $505,000.

Topic: Asset Amortization after Acquisition

LO: 2

35.Compute amortization for 2015.

a.  $43,500

b.  $28,500

c.  $13,500

d.  $31,500

Topic: Consolidated Stockholders’ Equity after Acquisition

LO: 2

36.What amount of Mahl'sstockholders' equity will be included in the consolidated balance sheet at date of acquisition?

a.  $-0-

b.  $450,000

c.  $930,000

d. $180,000

The following information applies to Questions 37-39.

On January 1, 2013, Fastpro, Inc. purchased Slowmo Corporation for $335,000.  On that date the net assets of Slowmo had a book value of $200,000, and book values were equal to fair values with the following exceptions:

FIFO Inventory –Undervalued, $10,000

Land–Undervalued, $5,000

Equipment (4 year life)–Undervalued, $20,000

Patent (10-year life)–Undervalued, $35,000

Topic: Equity Income

LO: 1

37.During 2013, Fastprohad income from its own operations of $60,000 and Slowmo had net income of $30,000.  What amount of 2013 Equity Income was recognized by Fastpro?

a.  $30,000

b.  $25,000

c.  $15,000

d.  $11,500

 

Topic: Consolidated Net Income

LO: 2

38.What is 2013consolidated net income?

a.  $71,500

b.  $60,000

c. $75,000

d.  $90,000

Topic: Goodwill

LO: 1

39.What amount of goodwill appeared on the consolidated balance sheet at December 31, 2013?

a.  $135,000

b. $65,000

c.  $70,000

d.  $-0-

Topic: Equity Investment

LO: 1

40.Roxlandpurchased 100% of Reederon January 1, 2014for $250,000.  On that date, Reeder's stockholders' equity was $250,000.  Reederhad net incomes of $40,000 and $45,000 for 2014and 2015, respectively.  The subsidiary paid dividends amounting to $5,000 in both years.  What was the balance in Equity Investment at December 31, 2015?

a.  $250,000

b.  $335,000

c.  $345,000

d. $325,000

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