ADVANCED ACCOUNTING-EBOOK ACCESS
14th Edition
ISBN: 9781264157068
Author: Hoyle
Publisher: MCG
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Question
Chapter 6, Problem 13Q
To determine
Explain when is this alternative approach required for computing EPS.
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Which of the following is/are true about accounting for business combinations when stock is issued by the acquirer (P) to acquire
the stock of the acquiree (S)?
I. Costs related to arranging the business combination are added (capitalized) to the Investment in 'S' account.
li. Stock issue costs are added (capitalized) to the Investment in 'S' account.
III. Costs related to arranging the business combination are expensed.
IV. Stock issue costs are treated as a reduction in the issue price (i.e., a reduction in APIC).
O A) II and IV only
B)
Il and IV only
C)
I only
D)
I and II only
E)
III only
Chapter 6 Solutions
ADVANCED ACCOUNTING-EBOOK ACCESS
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Problems 7 and 8 are based on the following...Ch. 6 - Prob. 8PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42P
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- Which of the following is a characteristic of the cost method of accounting for subsidiary operations? Select one: a. Parent company net income equals consolidated net income. b. More working paper eliminations are required than for the equity method of accounting. c. Consolidated amounts differ from the comparable amounts under the equity method of accounting. d. None of the abovearrow_forwardIn a consolidated statements workpaper, which items are carried forward from one section to another? Select one: a. The total of the income section to the retained earnings section and then the total of the retained earnings section to the balance sheet section. b. The eliminations must balance for each section in order to carry them forward. c. Parents retained earnings, but not Subsidiary d. Each section on the workpaper is separate, so no numbers are carried forwardarrow_forwardThe following independent statements may be true or false. Discuss the circumstances whereby the statement is true and the circumstances whereby it is false. Dividends declared by a Group (which is shown as an appropriation in the Consolidated Statement of Changes in Equity) comprises dividends declared by the Parent and dividends declared by a Subsidiary to its Non-controlling Interests.arrow_forward
- Which of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. The costs related to issuance of stock or equity securities shall be deducted/debited from any share premium from the issue and any excess is charged to “share issuance cost” reported as contract-equity account against either (1) share premium from other share issuances or (2) retained earnings Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an…arrow_forwardUnder the cost method, dividends from the subsidiary to the parent Ⓡ a. are recognized in income when received. b. are recognized in income when declared. c. are recognized in income when paid. Od. do not affect income. Save Answerarrow_forward(TCO D) How is a noncontrolling interest in the net income of an entity reported in the income statement?arrow_forward
- Dividends are recognized in profit or loss only when a. the entity's right to receive payment of the dividend is established b. it is probable that the economic benefits associated with the dividend will flow to the entity c. the amount of the dividend can be measured reliably d. all of the above.arrow_forwardIn accordance with PFRS 2, Share-based Payment, how should an entity recognize the change in fair value of the liability in respect of a cash-settled share-based payment transaction? Group of answer choices Do not recognize in the financial statements but disclose in the notes thereto. Recognize in other comprehensive income. Recognize in the statement of changes in entity. Recognize in profit or loss.arrow_forwardWhich of the following should be presented in the statement of changes in equity? A. Distributions to owners B. Investments by owners C. Change in ownership interest in subsidiary that does not result in a loss of control D. All of these are presented in the statement of changes in equityarrow_forward
- Which statement is true in relation to business combination achieved in stages? a. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in profit or loss. b. The pre-existing interest shall be remeasured at fair value with any resulting gain or loss recognized in retained earnings. c. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in other comprehensive income. d. The pre-existing interest shall not be remeasured.arrow_forwardWhich consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.arrow_forwardDividends are recognized in profit or loss only when: Group of answer choices A. The amount of the dividend can be measured reliably. B. All of these. C. It is probable that the economic benefits associated with the dividend will flow to the entity. D. The entity’s right to receive payment of the dividend is established.arrow_forward
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