Choose the correct. A parent buys 32 percent of a subsidiary in one year and then buys an additional 40 percent in the next year. In a step acquisition of this type, the original 32 percent acquisition should bea. Maintained at its initial value.b. Adjusted to its equity method balance at the date of the second acquisition.c. Adjusted to fair value at the date of the second acquisition with a resulting gain or loss recorded.d. Adjusted to fair value at the date of the second acquisition with a resulting adjustment to additional paid-in capital.

Choose the correct. A parent buys 32 percent of a subsidiary in one year and then buys an additional 40 percent in the next year. In a step acquisition of this type, the original 32 percent acquisition should bea. Maintained at its initial value.b. Adjusted to its equity method balance at the date of the second acquisition.c. Adjusted to fair value at the date of the second acquisition with a resulting gain or loss recorded.d. Adjusted to fair value at the date of the second acquisition with a resulting adjustment to additional paid-in capital.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 32P

See similar textbooks

Similar questions

An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?a. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.b. The entity's net assets should be remeasured at fair value at acquisition date.
An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?I. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.Il. The entity's net assets should be remeasured at fair value at acquisition date. a. II only b. Neither I nor II c. Both I and II d. I only
A parent buys 32 percent of a subsidiary in one year and then buys an additional 40 percent in the next year. In a step acquisition of this type, the original 32 percent acquisition should bea. Maintained at its initial value.b. Adjusted to its equity method balance at the date of the second acquisition.c. Adjusted to fair value at the date of the second acquisition with a resulting gain or loss recorded.d. Adjusted to fair value at the date of the second acquisition with a resulting adjustment to additional paid-in capital.
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisitionC. Consolidated Total Liabilities at the date of acquisitionD. Consolidated Equity at the date of acquisition
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS: Consolidated Equity at the date of acquisition
An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?I. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.Il. The entity's net assets should be remeasured at fair value at acquisition date. Neither I nor II I only II only Both I and II
ABC Company acquired XYZ Company in an acquisition. What date should be used as the acquisition date for the transaction? * The date ABC signs the contract to purchase the business. The date ABC obtains control of XYZ. The date that all contingencies related to the transaction are resolved. The date ABC purchased more than 20% of the stock of XYZ.
Which of the following statements regarding the acquisition method of accounting for business combinations is/are correct? (i) It is applied only when the acquirer purchases 100% of the share capital of the acquiree (ii) It requires calculating goodwill (iii) It is applied at every balance sheet date subsequent to the date of acquisition
Assume that P acquires controlling interest in S and there is a Differential at the acquisition date. Puses the fully adjusted equity method to account for its investment. At year-end, when the parent's Income from S account is eliminated in the consolidation process, what replaces this item on the consolidated financial statements? A) The details of S's reported ('book') net income, with S's expenses based on acquisition date book (G/L) values. B) The details of S's 'true/adjusted' net income, with S's expenses based on acquisition date fair values due to amortization of any Differential. C) NCI in Net lIncome. D) The amortization of the acquisition-date excess cost details only.
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: Compute for the total liabilities at the date of acquisition
hf. Darnell Ltd. acquired 60 percent of Tisha Co. The acquisition calls for Darnell to issue an additional 100 shares to Tisha in one year if Tisha meets a predetermined sales goal. This contingent consideration a. should be reported only in the notes to the financial statement. b. should be valued at its fair value as of the acquisition date. c. should be valued at fair value as of the acquisition date and revalued at the year-end. d. should not be reported unless the goal is met.
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: compute for the consolidated total assets at the date of acquisition