The consolidated balance of fixed assets will be affected by working paper entries involving all of the following, except: a.Excess of fixed asset FV over BV of the parent at the date of acquisition b.Amortization of the excess of fixed asset FV over BV of the subsidiary at the date of acquisition c.Unrealized gain or loss on intercompany sale of fixed asset d.Realized gain or loss on intercompany sale of fixed asset

The consolidated balance of fixed assets will be affected by working paper entries involving all of the following, except: a.Excess of fixed asset FV over BV of the parent at the date of acquisition b.Amortization of the excess of fixed asset FV over BV of the subsidiary at the date of acquisition c.Unrealized gain or loss on intercompany sale of fixed asset d.Realized gain or loss on intercompany sale of fixed asset

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 15CYBK

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The consolidated balance of fixed assets will be affected by working paper entriesinvolving all of the following,except: A.Excess of fixed asset FV over BV of the parent at the date of acquisitionB.Unrealized gain or loss on intercompany sale of fixed assetC.Realized gain or loss on intercompany sale of fixed assetD.Amortization of the excess of fixed asset FV over BV of the subsidiary at the date ofacquisition
The consolidated balance of fixed assets will be affected by working paper entries involving all of the following, except: A. Excess of fixed asset FV over BV of the parent at the date of acquisition B. Amortization of the excess of fixed asset FV over BV of the subsidiary at the date of acquisition C. Realized gain or loss on intercompany sale of fixed asset D. Unrealized gain or loss on intercompany sale of fixed asset
At acquisition date the net assests of the acquired subsidairy are included in the consolidated financial statement at their acquisition date fair value. However most of the parent assets and liabilities are measured on an historical cost basis . Is this Consistent ? Explain.
If a revaluation of the subsidiary’s assets is performed on consolidation, the subsidiary’s assets are carried into the consolidated statement of financial position at: Select one: a. Net present value. b. Historical cost. c. Fair value. d. Current replacement cost.
In reference to the downstream or upstream sale of depreciable assets, which of the following statements is correct? A. Gains and losses appear in the parent-company accounts in the year of sale and must be eliminated by the parent company determining its investment income under equity method of accounting. B. The initial effect of unrealized gains and losses from downstream sales of depreciable asset is different from the sale of non-depreciable assets. C. Gains, but not losses, appear in the parent-company accounts in the year of sale and must be eliminated by the parent company in determining its investment income under the equity method of accounting. D. Upstream sales from the subsidiary to the parent company always result in unrealized gains or losses.
At acquisition date, the net assets of the acquired subsidiary are included in the consolidated financial statements at their acquisition date fair value. However, most of the parent's assets and liabilities are measured on a historical cost basis. Is this consistent? Explain Briefly.
Describe the presentation of the consolidated balance sheet and income statement indicatinga) The inclusion of goodwill and gain on acquisitionb) Disclosures necessary to the financial statements.c) The impairment of goodwill. (Mention any topics / subtopics from the FASB codification if used)
Which of the following is incorrect regarding measurement period? a. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. b. During the measurement period, the acquirer shall also recognise additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. c. The measurement period ends as soon as the acquirer receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. d. During the measurement period, the acquirer shall prospectively adjust the provisional amounts recognised at the acquisition date…
Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer choices a.When the amount of a bargain purchase exceeds the value of the applicable liability held by the acquired company. b.In an acquisition when the value of all assets and liabilities cannot be determined. c.When any bargain purchased is created d.In a combination created in the middle of the fiscal year
Statement I. Upon consolidation, the goodwill account should be debited in the elimination entry if the consideration transferred, previously held interest, and non-controlling interest are less than the fair value of net assets acquired.Statement II. In a net asset acquisition, the acquirer should recognize the goodwill as an asset in its separate financial statements. a. Both statements are true. b. Both statements are false. c. Statement I is true; Statement II is false. d. Statement I is false; Statement II is true.
When an entity sells a non-current asset at a profit to another entity within the same group, which of the following adjustments is necessary on consolidation? Select one: a. Dr Asset, DR Gain on sale b. Dr Gain on sale, CR Asset c. Dr Gain on sale, CR Cash d. Dr Asset, CR Cash
a) The amount of the adjustment to the non-controlling interest in consolidated net assets is equal to the non-controlling interest’s percentage of the A. Realized intercompany gain at the end of the period. B. Unrealized intercompany gain at the beginning of the period C. Realized intercompany gain at the beginning of the period D. Unrealized intercompany gain at the end of the period b) In years subsequent to the upstream intercompany sale of non-depreciable assets, the necessary consolidated workpaper entry is debit to the A. Non-controlling interest and retained earnings (parent) accounts, and credit to the non-depreciable asset B. No entries are necessary C. Non-depreciable asset and credit to non-controlling interest and Investment in Subsidiary account. D. Retained Earnings (parent) account and credit to non-depreciable asset.