Exam 2 Wrong Answers

Question 0

What journal entry is recorded to defer unrealized gross profit?

Answer 0

Equity in investee income. 10,000

Investment in Sub. 10,000

Question 1

What is the name for the account for recognizing income when a company owns a 20-50% stake in another company and is calculating its investment balance in that company?

Answer 1

Income accrual 2014. Xxx

Income accrual 2015. Xxx

Question 2

What are the terms used for deferral and recognition of gross profit when calculating equity income for 2014 and 2015?

Answer 2

Intra entity profit recognized on 2014 Transfer. Xxx

Intra entity profit deferred on 2015 Transfer. Xxx

Question 3

What is another way of titling Equity in 2015 Lindman Income, when Lindman is the investee and Matthew is the investor?

Answer 3

Equity Income recognized by Matthew in 2015

Question 4

What’s another name for income accrual?

Answer 4

Basic equity accrual

Question 5

What is a good title for assigning excess fair value?

Answer 5

Allocation of Acquisition-Date Excess Fair Value

Question 6

What is the entry when a company pays accountants and lawyers $20,000 for an acquisition expense?

Answer 6

Accounting and legal expense. 20,000

Cash. 20,000

Question 7

If Haynes has applied the initial value method to account for its investment, what adjustment is needed to the beginning retained earnings on December 31, 2015, consolidation worksheet?

2) adjustment entry for partial equity method?

Answer 7

Investment in Turner. Xxx
R/E. Xxx

2) Investment in Turner. Xxx
R/E. Xxx

Question 8

When calculating ending retained earnings, what net income figures should be included?

Answer 8

Net income of parent only