Acc/401 Advanced Accounting Week 7 Quiz

ACC 401 Week 7 Quiz StrayerClick on the Link Below to Purchase A+ ra!e! Course "aterialhtt#$%%www&hw'ala&co(%ACC)401)A!*ance!)Accountin')Week)7)Quiz)Strayer)+7,&ht(Quiz - Cha#ter . an! 10Chan'es in /wnershi# 0nterestMultiple Choice1. When the parent company sells a portion of its investment in a subsidiary, the workpaper entry to adjust for the current years income sold to noncontrolling stockholders includes aa. debit to Subsidiary Income Sold.b. debit to !uity in Subsidiary Income.c. credit to !uity in Subsidiary Income.d. credit to Subsidiary Income Sold.". # parent company may increase its ownership interest in a subsidiary bya. buying additional subsidiary shares from third parties.b. buying additional subsidiary shares from the subsidiary.c. having the subsidiary purchase its shares from third parties.d. all of these.$. If a portion of an investment is sold, the value of the shares sold is determined by using the%1. first&in, first&out method.". average cost method.$. specific identification method.a. 1b. "c. $d. 1 and $'. If a parent company ac!uires additional shares of its subsidiarys stock directlyfrom the subsidiary for a price less than their book value%1. total noncontrolling book value interest increases.". the controlling book value interest increases.$. the controlling book value interest decreases.a. 1b. "c. $d. 1 and $(. If a subsidiary issues new shares of its stock to noncontrolling stockholders, the book value of the parents interest in the subsidiary maya. increase.b. decrease.c. remain the same.d. increase, decrease, or remain the same.). *he purchase by a subsidiary of some of its shares from noncontrolling stockholders results in the parent companys share of the subsidiarys net assetsa. increasing.b. decreasing.c. remaining unchanged.d. increasing, decreasing, or remaining unchanged.+. *he computation of noncontrolling interest in net assets is made by multiplying the noncontrolling interest percentage at thea. beginning of the year times subsidiary stockholders e!uity amounts.b. beginning of the year times consolidated stockholders e!uity amounts.c. end of the year times subsidiary stockholders e!uity amounts.d. end of the year times consolidated stockholders e!uity amounts.,. -nder the partial e!uity method, the workpaper entry that reverses the effect of subsidiary income for the year includes a%1. credit to !uity in Subsidiary Income.". debit to Subsidiary Income Sold.$. debit to !uity in Subsidiary Income.a. 1b. "c. $d. both 1 and ".. /olk0ompanyowned"',111ofthe$1,111outstandingcommonsharesofSloan0ompanyon2anuary1, "111. /olksshareswerepurchasedatbookvalue when the fair values of Sloans assets and liabilities were e!ual to theirbook values. *he stockholders e!uity of Sloan 0ompany on 2anuary 1, "111,consisted of the following%0ommon stock, 31( par value3 '(1,1114ther contributed capital $$+,(115etained earnings+1",(11*otal 31,(11,111Sloan0ompanysold+,(11additionalsharesofcommonstockfor3.1pershare on 2anuary ", "111. If /olk 0ompany purchased all +,(11 shares, thebookentrytorecordthepurchaseshouldincreasetheInvestment inSloan0ompany account bya. 3()",(11.b. 3(.1,)"(.c. 3)+(,111.d. 31(1,111.e.Some other account.11. /olk 0ompany owned "',111 of the $1,111 outstanding common shares of Sloan 0ompany on 2anuary 1, "111. /olks shares were purchased at book value when the fair values of Sloans assets and liabilities were e!ual to their book values. *he stockholders e!uity of Sloan 0ompany on 2anuary 1, "111, consisted of the following%0ommon stock, 31( par value3 '(1,1114ther contributed capital $$+,(115etained earnings+1",(11*otal 31,(11,111Sloan0ompanysold+,(11additionalsharesofcommonstockfor3.1pershareon2anuary", "111. If all +,(11shares weresoldtononcontrollingstockholders, theworkpaper adjustment neededeachtimeaworkpaper isprepared should increase 6decrease7 the Investment in Sloan 0ompany bya. 631'1,)"(7.b. 31'1,)"(.c. 6311",(117.d. 31.",111.e. 8one of these.11. 4n 2anuary 1, "11), /arent 0ompany purchased $",111 of the '1,111 outstanding common shares of Sims 0ompany for 31,("1,111. 4n 2anuary 1, "111, /arent 0ompany sold ',111 of its shares of Sims 0ompany on the open market for 3.1 per share. Sims 0ompanys stockholders e!uity on 2anuary 1, "11), and 2anuary 1, "111, was as follows%19191) 1919110ommon stock, 311 par value 3'11,111 3 '11,1114ther contributed capital '11,111 '11,1115etained earnings ,11,1111,'11,11131,)11,111 3","11,111*he difference between implied and book value is assigned to Sims 0ompanys land. *he amount of the gain on sale of the ',111 shares that should be recorded on the books of /arent 0ompany isa. 3),,111.b. 31+1,111.c. 3.),111.d. 3"11,111.e. 8one of these.1". 4n 2anuary 1, "11), /atterson 0orporation purchased "',111 of the $1,111 outstanding common shares of Stewart 0ompany for 31,1'1,111. 4n 2anuary 1, "111, /atterson 0orporation sold $,111 of its shares of Stewart 0ompany onthe open market for 3.1 per share. Stewart 0ompanys stockholders e!uity on2anuary 1, "11), and 2anuary 1, "111, was as follows%19191) 1919110ommon stock, 311 par value 3$11,111 3 $11,1114ther contributed capital $11,111 $11,1115etained earnings)11,111 1,1(1,11131,"11,111 31,)(1,111*he difference between implied and book value is assigned to Stewart 0ompanys land. #s a result of the sale, /atterson 0orporations Investment in Stewart account should be credited fora. 31)(,111.b. 3"1),"(1.c. 31"1,111.d. 31'",(11.e. 8one of these.1$. 4n 2anuary 1, "11), /eterson 0ompany purchased 1),111 of the "1,111 outstanding common shares of Swift 0ompany for 3+)1,111. 4n 2anuary 1, "111, /eterson 0ompany sold ",111 of its shares of Swift 0ompany on the open market for 3.1 per share. Swift 0ompanys stockholders e!uity on 2anuary 1, "11), and 2anuary 1, "111, was as follows%19191) 1919110ommon stock, 311 par value 3"11,111 3 "11,1114ther contributed capital "11,111 "11,1115etained earnings '11,111+11,1113,11,111 31,111,111*he difference between implied and book value is assigned to Swift 0ompanys land. #ssuming no other e!uity transactions, the amount of the difference between implied and book value that would be added to land on a workpaper for the preparation of consolidated statements on :ecember $1, "111, would bea. 31"1,111.b. 311(,111.c. 311(,111.d. 3,',111.e. 8one of these.1'. 4n 2anuary 1 "111, /aulson 0ompany purchased +(; of Shields 0orporation for 3(11,111. Shields stockholders e!uity on that date was e!ual to 3)11,111 and Shields had )1,111 shares issued and outstanding on that date. Shields 0orporation sold an additional 1(,111 shares of previously unissued stock on :ecember $1, "111.#ssume that /aulson 0ompany purchased the additional shares what would betheir current percentage ownership on :ecember $1, "111