Select True (T)or False (F)for Each of the Following Statements

question 31

Short Answer

Select True (T)or False (F)for each of the following statements:
_____ 1.A parent will recognize a gain or loss if it sells a portion of its investment in a subsidiary and maintains control after the sale.
_____ 2.A parent sells a portion of its investment in a subsidiary and no longer maintains control.This sale of shares represents a remeasuremenet event for the investee.
_____ 3.International financial reporting standards (IFRS)allow an option to value the noncontrolling interest with goodwill or to value the noncontrolling interest without goodwill.
_____ 4.Consolidated net income represents the combined net income of the parent and subsidiary after subtracting the noncontrolling interest in the net income of the subsidiary.
_____ 5.The total acquisition-date fair value of an acquired firm is the sum of the fair value of the controlling interest and the fair value of the noncontrolling interest.
_____ 6.When control of a subsidiary is acquired on a date other than the first day of a fiscal year,excess amortization expenses are pro-rated to include only the post-acquisition period.
_____ 7.For a mid-year acquisition following an equity method investment of the same company,the consolidated income statement will report consolidated revenues and expenses for the entire year.
_____ 8.In a step acquisition where the parent previously held a noncontrolling interest in the acquired firm,the parent remeasures the prior interest to fair value.
_____ 9.When a parent has control over a subsidiary with less than 100 percent ownership,and thereafter increases its ownership,the parent remeasures the prior interest to fair value.

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Definitions:

Variable Cost Per Unit

The cost that varies with the level of output or sales, calculated on a per-unit basis.

Selling Price Per Unit

The price at which a single unit of a product is sold to customers, not including discount or additional fees.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit contributes to covering fixed costs.

Variable Cost Per Unit

The cost that varies directly with the level of production or sales volume; it increases as production increases and decreases as production decreases.