答案和详解如下： 16．Company A acquired a 50 percent stake in Company T on January 1, 2003 by paying T’s shareholders $100,000 in cash. Pre-acquisition balance sheets for the two firms are presented below: Balance Sheet |
| Company A | Company T | Current assets | $400,000 | $60,000 | Fixed assets | 600,000 | 100,000 | Total | $1,000,000 | $160,000 |
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| Current liabilities | $50,000 | $ 30,000 | Common stock | 350,000 | 60,000 | Retained earnings | 600,000 | 70,000 | Total | $1,000,000 | $160,000 |
What are the post-acquisition balance sheet values for total assets for Company A under the equity and consolidation methods of accounting respectively?
A) $1,000,000 and $1,000,000. B) $1,060,000 and $1,000,000. C) $1,060,000 and $1,060,000. D) $1,000,000 and $1,060,000.
The correct answer was D) Using the equity method will result in a decrease of the current asset account. In this example the CA will decrease to $300,000. However, there should be contra-asset that is placed under the asset side of the balance sheet called "Investment in Company T." This amount will be $100,000, so the total assets will remain unchanged. Under consolidation, total assets will be $1,060,000 (400,000 + 60,000 + 600,000 + 100,000 – 100,000). 17．On December 31, 2006 Company P invests $5,000 in Company S in exchange for 25 percent of the company. During 2007 Company S earns $2,000 and pays a dividend of $500. If Company P uses the cost method of accounting, what values will be reported on the balance sheet and income statement? How much cash will be recognized from the investment?
| Balance Sheet
| Income Statement | Cash |
A) $5,000 $0 $0 B) $5,000 $125 $125 C) $5,000 $2,000 $500 D) $5,375 $500 $125
The correct answer was B) The carrying value on the balance sheet = $5,000 or the original investment. The income and cash recognized are equal to the dividend of $125.
18．The proportionate consolidation method results in: A) same net income as the equity method. B) same equity as the cost method. C) different equity as the equity method. D) different net income from the equity method.
The correct answer was A) The proportionate consolidation results in the SAME net income and equity as the equity method.
19．Which of the following methods is NOT considered U.S. GAAP? A) Consolidation method. B) Equity method. C) Proportionate consolidation method. D) Cost method.
The correct answer was C) U.S. GAAP only recognizes the cost, equity and consolidation methods. The proportionate consolidation is an analytical tool for analysts to evaluate joint venture entities properly, but it is not considered to be U.S. GAAP. 20．Which of the following statements regarding a comparison of the equity method with the consolidation method is FALSE?
A) ROE will tend to be higher under the equity method relative to consolidation. B) Net Income will be the same under both methodologies. C) Total Equity will be the same under both methodologies. D) Operating Income will tend to be higher under consolidation relative to the equity method.
The correct answer was A) Both net income and equity will be the same regardless of whether the equity method or consolidation is used to account for an intercorporate investment. Hence, ROE = net income / equity, will remain unchanged. Operating income tends to be higher under consolidation because minority interest is reported below the operating line in most cases on a consolidated income statement. | 
发表于 2008-4-2 17:20
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