level: Acquisition Method
Questions and Answers List
level questions: Acquisition Method
| Question | Answer |
|---|---|
| Acquisition Journal Entry | DR: Common Stock (Sub @ NBV) DR: APIC (Sub @ NBV) DR: RE (Sub @ NBV) CR: Investment in Sub (Parent @ FV) CR: Non-Controlling Interest (*FV) DR: Balance Sheet Adjustments to FV DR: Identifiable Asset Adjustments to FV DR/CR: Goodwill/Gain (Plug) |
| Non-Controlling Interest Calculation (Partial Goodwill - IFRS ONLY) | FV of Sub's Net Assets * NCI % |
| Non-Controlling Interest Calculation (Full Goodwill - IFRS and GAAP) | (Investment in Sub @ FV / % Owned)*% NCI |
| How much of intercompany transactions should be eliminated if a company is acquired for 80%? | 100%, ALL intercompany transactions must be eliminated regardless of % acquired |
| JE to remove intercompany profit from Inventory Sales | DR: Intercompany Sales (seller) CR: Intercompany COGS (seller) CR: COGS (purchaser) CR: Inventory (purchaser) |
| Excess depreciation from intercompany fixed asset sales should be increased/reduced to which rate? | Old Rate |