Questions from Advanced Accounting

Q: On April 1, Year 1, Company P purchased 85%

On April 1, Year 1, Company P purchased 85% of S Company for total consideration of $357,000, which included $30,000 of contingent consideration as measured according to GAAP at fair value. Each compa...

Q: Distinguish among the following concepts: (a) Difference between

Distinguish among the following concepts: (a) Difference between book value and the value implied by the purchase price. (b) Excess of implied value over fair value. (c) Excess of fair value over impl...

Q: In what account is the difference between book value and the value

In what account is the difference between book value and the value implied by the purchase price recorded on the books of the investor? In what account is the “excess of implied over fair value” recor...

Q: How do you determine the amount of “the difference between book

How do you determine the amount of “the difference between book value and the value implied by the purchase price” to be allocated to a specific asset of a less than wholly owned subsidiary?

Q: The parent company’s share of the fair value of the net

The parent company’s share of the fair value of the net assets of a subsidiary may exceed acquisition cost. How must this excess be treated in the preparation of consolidated financial statements?

Q: What are the arguments for and against the alternatives for the

What are the arguments for and against the alternatives for the handling of bargain acquisitions? Why are such acquisitions unlikely to occur with great frequency?

Q: P Company acquired a 100% interest in S Company. On

P Company acquired a 100% interest in S Company. On the date of acquisition, the fair value of the assets and liabilities of S Company was equal to their book value except for land that had a fair val...

Q: What is the effect on the noncontrolling share of consolidated income that

What is the effect on the noncontrolling share of consolidated income that results from the recording in the consolidated statements workpaper of differences between book value and the value implied b...

Q: How should nonconsolidated subsidiaries be reported in consolidated financial statements?

How should nonconsolidated subsidiaries be reported in consolidated financial statements?

Q: What are pro forma financial statements? What is their purpose?

What are pro forma financial statements? What is their purpose?