Strayer ACC 401 , Winter 2014 ch-2 MCQ -The fair value of assets and liabilities of the acquired entity is to be ..

Question 16

The fair value of assets and
liabilities of the acquired entity is to be reflected in the financial
statements of the combined entity. When the acquisition takes place over a
period of time rather than all at once, at what time is the fair value of the
assets and liabilities of the acquired entity determined under SFAS 141R?

Question 17

Under SFAS 141R, what value of
the assets and liabilities is reflected in the financial statements on the
acquisition date of a business combination?

Question 18

Under SFAS 141R,

Question 19
SFAS
141R requires that all business combinations be accounted for using

Question 20

P Company acquires all of the
voting stock of S Company for $930,000 cash.
The book values of S Company’s assets are $800,000, but the fair values
are $840,000 because land has a fair value above its book value. Goodwill from the combination is computed as:

Question 21

Parental Company and Sub Company
were combined in an acquisition transaction.
Parental was able to acquire Sub at a bargain price. The sum of the fair
values of identifiable assets acquired less the fair value of liabilities
assumed exceeded the cost to Parental.
After eliminating previously recorded goodwill, there was still some
“negative goodwill.” Proper
accounting treatment by Parental is to report the amount as

Question 22

Once a reporting unit is
determined to have a fair value below its carrying value, the goodwill
impairment loss is computed by comparing the

Question 23

With an acquisition, direct and
indirect expenses are

Question 24

If an impairment loss is recorded
on previously recognized goodwill due to the transitional goodwill impairment
test, the loss should be treated as a(n):

Question 25

P Co. issued 5,000 shares of its
common stock, valued at $200,000, to the former shareholders of S Company two
years after S Company was acquired in an all-stock transaction. The additional shares were issued because P
Company agreed to issue additional shares of common stock if the average post
combination earnings over the next two years exceeded $500,000. P Company will treat the issuance of the
additional shares as a (decrease in)

Question 26

In a period in which an
impairment loss occurs, SFAS No. 142 requires each of the following note
disclosures except

Question 27

The first step in determining
goodwill impairment involves comparing the

Question 28

If the value implied by the
purchase price of an acquired company exceeds the fair values of identifiable
net assets, the excess should be
Question 29

The fair value of net
identifiable assets of a reporting unit exclusive of goodwill of Y Company is
$270,000. The carrying value of the reporting unit’s net assets on Y Company’s
books is $320,000, including $50,000 goodwill. If the reported goodwill
impairment for the unit is $10,000, what would be the fair value of the
reporting unit?

Question 30

The fair value of net identifiable
assets exclusive of goodwill of a reporting unit of X Company is $300,000. On X
Company’s books, the carrying value of this reporting unit’s net assets is
$350,000, including $60,000 goodwill. If the fair value of the reporting unit
is $335,000, what amount of goodwill impairment will be recognized for this
unit?