TEST BANK For Advanced Financial Accounting 13th Edition By Theodore Christensen Chapter 1 - 20 |Complete Newest Version

Test Bank for Advanced Financial Accounting1
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3th Edition
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By Theodore Christensen
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,TEST BANK FOR
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Advanced Financial Accounting 13th Edition By Theodore Christensen
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Chapterm1 Intercorporatem Acquisitionsm andm Investmentsm inm Otherm Entities

1) Assumingm nom impairmentm inm valuem priorm tom transfer,m assetsmtransferredm bymam parentm company
m tom
anotherm entitym itm hasm createdm shouldm bem recordedm bymthem newlym createdm entitymatm them assets':
A) costmtom them parentm company.
B) bookm valuem onmthem parentm company'sm booksm atm them datem ofm transfer.
C) fairm valuem atm them datem ofmtransfer.
D) fairmvaluemofmconsiderationmexchangedmbymthemnewlymcreatedmentity.

Answer:m BmDiffi
culty:m1mEasy
Topic:mInternalmExpansion:mCreatingmamBusinessmEntity;mValuationmofmBusinessmEntitiesmLear
ningmObjective: 01-
01mUnderstandmandmexplainmthemreasonsmformandmdifferentmmethodsmofmbusinessm expansion,m the
m typesm ofm organizationalm structures,m andm them typesm ofm acquisitions.;m 01m-

03mMakem calculationsmandm preparem journalm entriesm form them creationm ofmam businessm entity.
Bloom's:
RemembermAACSB
:m ReflectivemThinkingmAICPA:
FNm Decisionm Makin
g

2) Givenmthemincreasedmdevelopmentmofmcomplexmbusinessmstructures,mwhichmofmthemfollowingm
regulatorsmismresponsiblem formthemcontinuedmusefulnessmofmaccountingmreports?
A) Securitiesm andm Exchangem Commissionm (SEC)
B) Publicm Companym Accountingm Oversightm Boardm (PCAOB)
C) Financialm Accountingm Standardsm Boardm (FASB)
D) Allm ofmthem otherm answersm arem correct

Answer:m DmDiffi
culty:m1mEasy
Topic: Anm Introductionm tom Complexm Businessm Structures
LearningmObjective: 01-
01mUnderstandmandmexplainmthemreasonsmformandmdifferentmmethodsmofmbusinessm expansion,m th
em typesm ofmorganizationalm structures,m andm them typesm ofmacquisitions.
Bloom's:
RemembermAACSB
:m ReflectivemThinkingmAICPA:
FNmReporting

3) Ambusinessmcombinationminmwhichmthemacquiredmcompany'smassetsmandmliabilitiesmaremcombinedm
withmthosemofmthemacquiringm companymintomam singlem entitymismdefinedmas:
A) Stockmacquisition
B) Leveragedmbuyout

,C) StatutorymMerger
D) Reversem statutorym rollup

, Answer:m CmDiffi
culty:m1mEasy
Topic: Organizationalm Structurem andm Financialm Reporting
LearningmObjective: 01-
04mUnderstandmandmexplainmthemdifferencesmbetweenmdifferentmformsmofmbusinessmcombinations
.
Bloom's:
RemembermAACSB
:m ReflectivemThinkingmAICPA:
FNm Decisionm Makin
g

4) Inm whichm ofmthem followingm situationsm dom accountingm standardsm notm requirem thatm them financ
ialmstatementsmofmthem parentm andm subsidiarymbemconsolidated?
A) Amcorporationmcreatesmamnewm100mpercentm ownedmsubsidiary
B) Am corporationm purchasesm 90m percentm ofmthem votingm stockm ofm anotherm company
C) Am corporationm hasm bothm controlm andm majoritym ownershipm ofm anm unincorporatedm company
D) Am corporationm ownsm less-thanm am controllingm interestm inm anm unincorporatedm company

Answer:m DmDiffi
culty:m1mEasy
Topic: Organizationalm Structurem andm Financialm Reporting
LearningmObjective: 01-
01mUnderstandmandmexplainmthemreasonsmformandmdifferentmmethodsmofmbusinessm expansion,m them t
ypesm ofm organizationalm structures,m andm them typesm ofmacquisitions.
Bloom's:
RemembermAACSB
:m ReflectivemThinkingmAICPA:
FNm Decisionm Makin
g

Duringmitsminception,mDevonmCompanympurchasedmlandmform$100,000mandmambuildingmform$180,0
00.mAftermexactlym3myears,mitmtransferredmthesemassetsmandmcashmofm$50,000mtomamnewlymcreatedmsubsi
diary,mReganmCompany,minmexchangemform15,000msharesmofmRegan'sm$10mparmvaluemstock.mDevon
m uses m straight-

linemdepreciation.mUsefulmlifemformthembuildingmism30myears,mwithmzeromresidualmvalue.mAnmapprai
salmrevealedmthatmthembuildingmhasmam fairm valuemofm$200,000.

5) Basedm onmthem informationm provided,m atm them timem ofm them transfer,m Reganm Companym shouldm record:
A) Buildingm atm $180,000m andm nom accumulatedm depreciation.
B) Buildingm atm $162,000m andm nom accumulatedm depreciation.
C) Buildingm atm $200,000m andm accumulatedm depreciationm ofm $24,000.
D) Buildingm atm $180,000m andm accumulatedm depreciationm ofm $18,000.

Answer:mmDmDifficult
y:m 2m Medium
Topic:
Valuationm ofm Businessm Entities;m Accountingm form Internalm Expansion:m Creatingm Busine
ssmEntities
LearningmObjective: 01-
04mUnderstandmandmexplainmthemdifferencesmbetweenmdifferentmformsmofmbusinessm combinations.;