Starting from the separate inventory balances of the affiliates, the consolidated inventory balance will be affected by all of the following, except: a.Unrealized profit on ending inventory b.Amortization of the excess of inventory FV over BV of the subsidiary at the date of acquisition c.Realized profit on beginning inventory d.Excess of inventory FV over BV of the subsidiary at the date of acquisition

Starting from the separate inventory balances of the affiliates, the consolidated inventory balance will be affected by all of the following, except: a.Unrealized profit on ending inventory b.Amortization of the excess of inventory FV over BV of the subsidiary at the date of acquisition c.Realized profit on beginning inventory d.Excess of inventory FV over BV of the subsidiary at the date of acquisition

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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Starting from the separate inventory balances of the affiliates, the consolidated inventory balance will be affected by all of the following, except: A. Excess of inventory FV over BV of the subsidiary at the date of acquisition B. Unrealized profit on ending inventory C. Realized profit on beginning inventory D. Amortization of the excess of inventory FV over BV of the subsidiary at the date of acquisition
Consolidated inventory balance is composed of the book values of the parent’sand the subsidiary’s inventory__________. a.plus/minus the effects of the difference between book value and fair value of thesubsidiary’s inventory balance on the date of acquisition that remains unsold as of yearend, minus the unrealized profit on ending inventory, plus the realized profit on beginninginventoryb.plus/minus the effects of the difference between book value and fair value of thesubsidiary’s inventory balance on the date of acquisition that remains unsold as of yearend, and minus the unrealized profit on ending inventoryc.plus/minus the effects of the difference between book value and fair value of thesubsidiary’s inventory balance on the date of acquisition that remains unsold as of yearendd.and nothing else
Starting from the separate cost of goods sold of the affiliates, the consolidatedcost of goods sold will be affectedby all of the following, except: a.Realized profit on beginning inventoryb.Excess of inventory FV over BV of the subsidiary at the date of acquisitionc.Amortization of the excess of inventory FV over BV of the subsidiaryd. Unrealized profit on ending inventory
Consolidated inventory balance is composed of the book values of the parent’s andthe subsidiary’s inventory A.and nothing elseB.plus/minus the effects of the difference between book value and fair value of the subsidiary’sinventory balance on the date of acquisition that remains unsold as of year-end, minus theunrealized profit on ending inventory, plus the realized profit on beginning inventoryC.plus/minus the effects of the difference between book value and fair value of the subsidiary’sinventory balance on the date of acquisition that remains unsold as of year-end, and minusthe unrealized profit on ending inventoryD.plus/minus the effects of the difference between book value and fair value of the subsidiary’sinventory balance on the date of acquisition that remains unsold as of year-end
Starting from the separate cost of goods sold of the affiliates, the consolidated cost ofgoods sold will be affectedby all of the following, except: A.Excess of inventory FV over BV of the subsidiary at the date of acquisitionB.Unrealized profit on ending inventoryC.Realized profit on beginning inventoryD.Amortization of the excess of inventory FV over BV of the subsidiary
Starting from the separate cost of goods sold of the affiliates, the consolidated cost of goods sold will be affected by all of the following, except: A. Amortization of the excess of inventory FV over BV of the subsidiary B. Unrealized profit on ending inventory C. Excess of inventory FV over BV of the subsidiary at the date of acquisition D. Realized profit on beginning inventory
Statement 1: Consolidated inventory on the statement of financial position is recorded at fair market value to the affiliated group. Statement 2: If the intercompany seller is the subsidiary, it is the subsidiary's income that needs adjustment. Which statement/s is TRUE?
In situations where there are routine inventory sales between parent companiesand subsidiaries, when preparing the consolidation statements, which of thefollowing line item is indifferent to the sales being either upstream ordownstream? A. Consolidated retained earningsB. Non-controlling Interest expenseC. Consolidated gross profitsD. Consolidated net income
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.Amortization of the excess of fixed asset FV over BV of the subsidiary at the date ofacquisitionc.Unrealized gain or loss on intercompany sale of fixed assetd.Realized gain or loss on intercompany sale of fixed asset
Which of the following income items may affect both Consolidated Net Income attributable to Parent and Non-Controlling Interest in Profit? * A. Gain on bargain purchase arising from business combination. B. Gain (loss) arising from intercompany sale of fixed assets from parent to subsidiary. C. Answer not given D. Amortization of excess in merchandise inventory of the acquired company. E. Impairment of a goodwill recognized using the proportionate or relevant share.
1. At the date of an acquisition which resulted to either goodwill or gain on bargain purchase, the acquisition method: A. Consolidates the subsidiary's assets and liabilities at book value. B. Consolidates the subisdiary's assets at fair value and libailities at book value. C. Consolidates the subsidiary's assets at book value and liabilities at fair value. D. Consolidates the subsidiary's assets and liabilities at fair value. 2. The consideration transferred in a business combination will most likely include which of the following? A. The transaction price in an arrangement that is primarily for the benefit of the acquirer or the combined entity. B. A contingent liability with an acquisition-date fair value but imposes an improbable outflow that the acquirer assumes in a business combination. C. The "off-market" value of a reacquired right. D. The acquisition-date fair value of a contingent consideration that is dependent upon the occurrence of a possible, but not probable,…
In determining controlling interest in consolidated income in the consolidated financial statements, unrealized intercompany profit on inventory acquired by a parent from its subsidiary should: a. Not be eliminated b. Be eliminated to the extent of the non-controlling interest in the subsidiary. c. Be eliminated to the extent of the parent company’s controlling interest in the subsidiary d. Be eliminated in full