上海对外经贸大学 高级财务会计学笔记-高级财务会计学（英）chapter 10.docVIP

PAGE30

Copyright?2015PearsonEducation,Inc.

AdvancedAccounting,12e(Beamsetal.)

Chapter10SubsidiaryPreferredStock,ConsolidatedEarningsPerShare,andConsolidatedIncomeTaxation

10.1MultipleChoiceQuestions

Usethefollowinginformationtoanswerthequestion(s)below.

OnDecember31,2013,ParminterCorporationownsan80%interestinthecommonstockofSanchezCorporationandan80%interestinSanchezspreferredstock.OnDecember31,2013,Sanchezsstockholdersequitywasasfollows:

10%preferredstock,cumulative,$10parvalue $50,000

Commonstock 350,000

Retainedearnings 100,000

Totalstockholdersequity $500,000

OnDecember31,2013,preferreddividendsarenotinarrears.Sanchezhad2014netincomeof$30,000andonlypreferreddividendsaredeclaredandpaidin2014.Therearenobookvalue/fairvaluedifferentialsassociatedwithParmintersinvestments.

1)HowmuchshouldtheParmintersInvestmentinSanchez—CommonStock,changeduring2014?

A)$5,000

B)$20,000

C)$25,000

D)$30,000

Answer:B

Explanation:B)($30,000-$5,000)×80%

Objective:LO1

Difficulty:Moderate

2)Whatshouldbethenoncontrollinginterestshare,commonintheconsolidatedfinancialstatementsofParminterfortheyearendingDecember31,2014?

A)$5,000

B)$20,000

C)$25,000

D)$30,000

Answer:A

Explanation:A)($25,000×20%)

Objective:LO1

Difficulty:Moderate

3)Whatshouldbethenoncontrollinginterestshare,preferredintheconsolidatedfinancialstatementsofParminterfortheyearendingDecember31,2014?

A)$1,000

B)$2,000

C)$4,000

D)$5,000

Answer:A

Explanation:A)($5,000×20%)

Objective:LO1

Difficulty:Moderate

4)Asubsidiaryhasdilutivesecuritiesoutstandingthatincludeconvertiblebondspayable.Thebondsareconvertibleintotheparentscommonstock.Whencalculatingconsolidateddilutedearningspershare,theconvertiblebondswillaffect

A)thenumeratorofconsolidateddilutedEPSonly.

B)thedenominator