Question

In: Accounting

1a) When consolidating the accounts of a parent and subsidiary in subsequent years, eliminating entry (O)...

1a)

When consolidating the accounts of a parent and subsidiary in subsequent years, eliminating entry (O) recognizes total write-offs of subsidiary revaluations:

As of the end of the current year.

As of the beginning of the current year.

As of the date of acquisition.

For the current year.

1b)

When consolidating the accounts of a parent and subsidiary in subsequent years, eliminating entry (R) recognizes revaluations of the subsidiary's assets and liabilities:

For the current year.

As of the beginning of the current year.

As of the end of the current year.

As of the date of acquisition.

1c)

Consolidation eliminating entries (C), (E), (R), and (O) fully eliminate the parent's Investment in Subsidiary account at what stage?

After eliminating entries (C), (E) and (R)

After eliminating entries (C), (E), (R) and (O)

After eliminating entries (C) and (E)

After eliminating entry (C)

1d)

Which statement is true concerning impairment testing of identifiable intangible assets, following U.S. GAAP?

A)

For limited life intangibles, the impairment loss is the difference between the sum of undiscounted expected cash flows and book value.

B)

If the sum of undiscounted expected cash flows is less than book value, the impairment loss calculation for limited life intangibles is the same as for indefinite life intangibles.

C)

A qualitative test may be used for both limited life and indefinite life intangibles.

D)

A qualitative test may be used for limited life intangibles but not indefinite life intangibles.

Solutions

Expert Solution

Solution:-

1 a) When consolidating the accounts of a parent and subsidiary in subsequent years, eliminating entry (O) recognizes total write-offs of subsidiary revaluations:-

For the current year.

Explanation:-

Recognize current year revaluatin write-offs.

1 b) When consolidating the accounts of a parent and subsidiary in subsequent years, eliminating entry (R) recognizes revaluations of the subsidiary's assets and liabilities:

As of the beginning of the current year.

Explanation:-

Recognize the beginning-of-current-year fair value revaluations.

1 c) Consolidation eliminating entries (C), (E), (R), and (O) fully eliminate the parent's Investment in Subsidiary account at what stage:-

After eliminating entries (C), (E) and (R)

Explanation:-

1 d) Which statement is true concerning impairment testing of identifiable intangible assets, following U.S. GAAP:-

For limited life intangibles, the impairment loss is the difference between the sum of undiscounted expected cash flows and book value.

ekkarill92 answered 2 years ago
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