Submitted by: Submitted by crazytexan
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Pages: 25
Category: Other Topics
Date Submitted: 10/04/2011 12:02 PM
Week 1
1. | Question : | The view that consolidated financial statements represent those of a single economic entity with several classes of stockholder interest is consistent with the |
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| Student Answer: | | a. parent company concept. |
| | | b. current practice concept. |
| | | c. historical cost company concept. |
| | | d. economic unit concept. |
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| Points Received: | 2 of 2 |
| Comments: | |
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2. | Question : | The parent company concept adjusts subsidiary net asset values for the |
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| Student Answer: | | a. differences between cost and fair value. |
| | | b. differences between cost and book value. |
| | | c. total fair value implied by the price paid by the parent. |
| | | d. total cost implied by the price paid by the parent. |
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| Points Received: | 2 of 2 |
| Comments: | |
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3. | Question : | Which of the following statements would not be a valid or logical reason for entering into a business combination? |
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| Student Answer: | | a. to increase market share. |
| | | b. to avoid becoming a takeover target. |
| | | c. to reduce risk by acquiring established product lines. |
| | | d. the operating costs of the combined entity would be more than the sum of the separate entities. |
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| Points Received: | 2 of 2 |
| Comments: | |
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4. | Question : | A potential offering price for a company is computed by adding the estimated goodwill to the |
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| Student Answer: | | a. book value of the company™s net assets. |
| | | b. book value of the company™s net identifiable assets. |
| | | c. fair value of the company™s net assets. |
| | | d. fair value of the company™s net identifiable assets. |
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| Points Received: | 2 of 2 |
| Comments: | |
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5. | Question : | The view that only the parent company's share of the...