Advanced Financial Accounting WGU - C243 Ch1 - 4 cohort. Questions and answers, 100% Accurate, rated A+

Assuming no impairment in value before transfer, assets transferred by Parent company to another entity it has created should be recorded by the newly created entity: a. Cost to the Parent Company b. Book Value of the parent's company books at the date of transfer c. Fair value at the date of transfer d. Fair value of consideration exchanged by the newly created entity - -Correct: b. Book Value of the parent's company books at the date of transfer. (Because paren company is not purchasing, they are transferring) If a company purchases the assets and assumes the liabilities of another company, the assets and liabilities recorded... - -... at their FV on the acquirer's books at the day of transfer. If a parent company acquires greater than 50% of outstanding common stock, the acquired company's (Subsidiary) assets and liabilities... - -... reflect on the consolidated balance sheet at the date of transfer at their FV. - finder's fee - legal fees - audit fees related to the stock issuing - stock registration fees - stock listing application fees Under the acquisition method, which fees relating to the business combination will be expended? - - Answer: Finder's fees + legal fees will be expensed.*Any fees associated with stocks will reduce APIC. Investment in Subsidiary is recorded... - -... at greater of the (1) Acquisition cost (2) FV of the identifiable net assets acquired. Investment in Plummet 510,000 Cash 500,000 Gain on Bargain Purchase 10,000 Implied Goodwill = - -= Fair Value of Entity - Fair Value of net identifiable assets