Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Remaining Time: 1 hour, 28 minutes, 01 second
Remaining Time: 1 hour, 28 minutes, 01 second. Ostion Completion Status: QUESTION 1 On January 1, 2020. Glass Inc (the parent) sells and costing $75,000 to its subsidiary Pana Co for 580,000 (its the current market value) If on December 31, 2023. Pane still owns the land, the correct consolidated journal entry would be A Credit land $5,000 and debit deferred gain on land sale $ 5.000 B. Debit retained earnings 55.000 and credit land 55.000 C Debit land $5,000 and credit retained earings $5.000 D.No entry is necessary since the transaction occurred 4 years before and there has been no change since E Debit land $5,000 and credit deferred gain on land sale $5,000 QUESTION 2 Which of the following statements is false concerning variable Interest entities (VIES)? A Most Vies are established for valid business purposes B. VIEs have little need for voting stock C VIEs may be formed as a source of low-cost financing D. Sometimes VIEs do not have independent management E. A VIE cannot take the legal form of a partnership or corporation QUESTION 3 For a business combination involving less-than-100% ownership, the acquirer recognizes and measures at the acquisition date all of the following excent A Identifiable assets acquired and abilities assumed at their full fair values B Goodwill or again from a bargain purchase. C. Non controlling interest at fair value OD The acquirer's net assets at fair value Click Save and Submit to save and submit. chok Save All Amewers to see all answers. Save ARA
(1)
The Correct option here is (B) Debit retained earnings $35,000 and Credit Land $35,000
Working note :-
Sold for the value-cost of the land = retained earnings
80,000-75,000=5,000
Eliminate the profit from retained earnings and decrease the value of land since consolidating profit on inter company sale of land should be eliminated.
(2)
Option E is false.
A Variable interest entity is a legal business structure, which may be either a partnership or a corporation. So a VIE can take the legal form of a partnership or a corporation.
(3)
The Correct option here is (D) The acquirer's New assets at fair value
Acquirer's assets are not recorded at net fair value. These assets are recorded at cost or fair value as per different GAAPS.
