5 12 acct 450

50451 Words May 2nd, 2015 202 Pages
ch5 Key

1. On November 8, 2009, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost
$61,500 and was sold to Wood for $89,000. From the perspective of the combination, when is the gain on the sale of the land realized?
A. Proportionately over a designated period of years
B. When Wood Co. sells the land to a third party
C. No gain can be recognized
D. As Wood uses the land
E. When Wood Co. begins using the land productively

Difficulty: Easy
Hoyle - Chapter 05 #1
2. Edgar Co. acquired 60% of Kindall Co. on January 1, 2009. During 2009, Edgar made several sales of inventory to Kindall. The cost and selling price of the goods were $140,000 and $200,000, respectively. Kindall still owned one-fourth of the goods at
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Thelma's reported net income for 2009 was $119,000. What is the non-controlling interest's share of Thelma's net income?
A. $35,700
B. $31,800
C. $39,600
D. $22,200
E. $26,100

Difficulty: Medium
Hoyle - Chapter 05 #8
9. Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2009, Clemente sold some equipment to Snider for $125,000. The equipment had cost $140,000. At the time of the sale, the balance in accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0 salvage value. Straight-line depreciation is used by both Clemente and Snider. At what amount should the equipment (net of depreciation) be included on the consolidated balance sheet dated December 31, 2009?
A. $100,000
B. $95,000
C. $75,000
D. $80,000
E. $85,000

Difficulty: Medium
Hoyle - Chapter 05 #9
10. During 2009, Von Co. sold inventory to its wholly-owned subsidiary, Lord Co. The inventory cost $30,000 and was sold to Lord for $44,000. From the perspective of the combination, when is the $14,000 gain realized? A. When the goods are sold to a third party by Lord
B. When Lord pays Von for the goods C. When Von sold the goods to Lord D. When the goods are used by Lord
E. No gain can be recognized since the transaction was between related parties

Difficulty: Easy
Hoyle - Chapter 05 #10
11. Bauerly Co. owned 70% of the voting common stock of Devin Co. During 2009, Devin made

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