Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.2.3E
Multiple-Choice Questions on Recording Business Combinations [AICPA Adapted]
Select the correct answer for each of the following questions.
3. Which of the following is the appropriate basis for valuing fixed assets acquired in a businesscombination carried out by exchanging cash for common stock?
a. Historical cost.
b. Book value.
c. Cost plus any excess of purchase price over book value of assets acquired.
d. Fair value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The assumption that a business enterprise will not be sold or liquidated in the foreseeable future is known as the:
Question 12 options:
economic entity assumption.
materiality.
going concern assumption.
fair value principle.
Which of the following is not a category to measure financial statement elements?
Question 13 options:
Cash-flow measures.
Current (market) value measures.
Cost-based measures.
Hybrid measures.
Please answer the multiple choice questions with only simple explanation. Thankyou!
6.) Assets or services acquired by a corporation in exchange for shares of stock should be recorded at:
the book value of the stock at the time of the transaction
the difference between the historical cost of the assets or services received and the amount of cash paid out as a result of the transaction
the historical cost of the assets or services received less any cash received as a result of the transaction
the fair market value of the assets or services received
7.) Which of the following regarding the conversion of preferred stock into common stock is true?
gains resulting from a conversion are recognized and losses resulting from a conversion are not recognized
losses resulting from a conversion are recognized and gains resulting from a conversion are not recognized
both gains and losses from a conversion are not recognized…
For the example below, list and describe the input(s) (observable or unobservable) and valuation technique(s) used. Determine the appropriate classification in the fair value hierarchy. Company A invested in the common stock of a private furniture manufacturer, Company Z. Quoted prices are not available for Company Z’s stock. Company Z’s fair value is measured as the present value of future cash flow. The measurement requires management assumptions such as discount rate, the amount and the timing of future cash flow.
Chapter 1 Solutions
Advanced Financial Accounting
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.16QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.2CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.6CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Multiple-Choice Questions Involving Account...Ch. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Balances Reported Following Combination Palm...Ch. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Acquisition in Multiple Steps Peal Corporation...Ch. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Computation of Account Balances Saspro Division is...Ch. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following nonmonetary exchange transactions may result in recorded gains or losses? A) Exchange of assets with a difference in future cash flows. B) Exchange of assets with no difference in future cash flows. C) Exchange of an equivalent interest in similar productive assets that causes the companies involved to remain in essentially the same economic position. D) Exchange of products by companies in the same line of business with no difference in future cash flows.arrow_forwardWhich will demonstrate an agreement to refinance (choose the incorrect one)? Group of answer choices 1.Equity security has in fact been issued before the issuance of the financial statements for the purpose of refinancing. 2.Preferred stock has in fact been issued before the issuance of financial statements for the purpose of obtaining working capital. 3.Before the issuance of the financial statements, the enterprise has in fact entered into a financing agreement that clearly permits the enterprise to refinance the currently maturing long-term debt on a long-term basis. 4.Long-term obligation has in fact been issued before the issuance of the financial statements for the purpose of refinancing.arrow_forward1. Once determined, the functional currency is * A. No answer B. Changed every time new PFRS is issued. C.Changed at the discretion of the entity’s management D. Not changed unless there is a change in underlying transactions, events, and conditions. 2. Which of the following is least relevant in determining an entity’s functional currency? A. The currency in which cash flows from operating activities are retained. B. The currency that influences the entity’s sale prices and costs. C. The currency in which the entity generates financing cash flows. D. The currency of the country in which the entity is located. 3. According to PAS 21, exchange differences arising from the translation of financial statements to a presentation currency are recognized in * A. Any of these B. Other comprehensive income C. Directly in equity D. Profit or lossarrow_forward
- Accounting ChangesIt is important in accounting theory to be able to distinguish the types of accounting changes:Required:a) If a public company desires to change from the sum-of-year’s-digits depreciation method to the straight-line method for its fixed assets, what type of accounting change will this be? How would it be treated? Discuss the permissibility of this change.b) If a public company obtained additional information about the service lives of some of its fixed assets that showed that the service lives previously used should be shortened, what type of accounting change would this be? Include in your discussion how the change should be reported in the income statement of the year of the change and what disclosures should be made in the financial statements or notes.arrow_forwardWhich of the following statements about the capital acquisitions ratio is incorrect? Group of answer choices The ratio is computed by dividing cash flow from operating activities by cash paid for property, plant, and equipment. Because the need for investment in property, plant, and equipment differs dramatically across industries, a firm's ratio should only be compared with its prior years' ratio or with firms in the same industry. A high ratio indicates more need for outside financing of current and future purchases of property, plant, and equipment. The ratio increases when an account receivable is collected.arrow_forwardMatch the correct term with its definition. A. cost principle i. if uncertainty in a potential financial estimate, a company should err on the side of caution and report the most conservative amount B. full disclosure principle ii. also known as the historical cost principle, states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition C. separate iii. (also referred to as the matching principle) matches expenses with associated revenues in the period in which the revenues were generated. D. monetary iv. business must report any business activities that could affect what is reported on the financial statements E. conservatism v. system of using a monetary unit by which to value the transaction, such as the US dollar. F. revenue vi. period of time in which you performed the service or gave the customer the product is the period in which revenue is recognized. G. expense vii. business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally.arrow_forward
- Which of the following items would be presented in a cash flow statement? Group of answer choices Proceeds from the issue of debentures Refinancing of long-term debt Payment of dividends through a share investment scheme Acquisition of an investment in a subsidiary for consideration consisting of an exchange of non-current assets and liabilitiesarrow_forward(Assumptions, Principles, and Constraint) Presented below are a number of operational guidelines and practices that have developed over time. Select the assumption, principle or constraint that most appropriately justifies these procedures and practices. A.) All significant post-balance sheet events are reported B.) Intangibles are capitalized and amortized over periods benefitted C.) Price -level chances are not recognized in the accounting records D.) Brokerage firms use market value for purposes of valuation of all marketable securities E.) Financial information is presented so that reasonably prudent investors will not be misled F.) Lower-of-cost-or-net realizable value is used to value inventories G.) Each enterprise is kept as a unit distinct from its owner or owners H.) All important aspects of bon indentures are presented in financial statements I.) Revenue is recorded when the performance obligation is satisfied J.) a company charges its sales commission costs to expense K.)…arrow_forwardInvestments in equity instruments are financial assets because they are Group of answer choices Cash equivalents. Contractual rights to receive cash or another financial asset from another entity. Equity instruments of another entity. Contractual rights to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Property, Plant and Equipment (PP&E) - Introduction to PPE; Author: Gleim Accounting;https://www.youtube.com/watch?v=e_Hx-e-h9M4;License: Standard Youtube License