company that experiences seasonal fluctuations in sales may purchase investments 1. Daniel Corporation acquired 100% of the common stock of Tysen Company for $1,100,000. On the date of acquisition, Tysen Companyâ€™s stockholdersâ€™ equity consisted of: Common Stock, $530,000; Retained Earnings, $410,000. The intercompany elimination to be made on a worksheet to prepare a consolidated balance sheet is a. Common Stockâ€“Tysen 530,000 Retained Earningsâ€“Tysen 410,000 Investment in Tysen Stock 940,000 b. Investment in Tysen Stock 1,100,000 Cash 1,100,000 c. Common Stockâ€“Daniel 530,000 Retained Earningsâ€“Daniel 410,000 Goodwill 160,000 Investment in Tysen Stock 1,100,000 d. Common Stockâ€“Tysen 530,000 Retained Earningsâ€“Tysen 410,000 Excess of Cost Over Book Value of Subsidiary 160,000 Investment in Tysen Stock 1,100,000 2. A consolidated income statement will show a. revenue and expense transactions between the consolidated entity and parties outside the affiliated group. b. only the parent companyâ€™s net income. c. only the income of partially owned subsidiaries. d. only the income of wholly owned subsidiaries. 3. When preparing a consolidated income statement, a. only the revenues and expenses of the parent company are presented. b. the income from partially owned subsidiaries is excluded. c. all revenue and expense transactions between the parent and subsidiaries must be eliminated. d. intercompany transactions between affiliated companies do not have to be eliminated. 4. Which of the following reasons best explains why a company that experiences seasonal fluctuations in sales may purchase investments in debt or stock securities? a. The company may have excess cash. b. The company may generate a significant portion of its earnings from investment income. c. The company may invest for the strategic reason of establishing a presence in a related industry. d. The company may invest for speculative reasons to increase the value in pension funds. 5. When bonds are sold, the gain or loss on sale is the difference between the a. sales price and the cost of the bonds. b. net proceeds and the cost of the bonds. c. sales price and the fair value of the bonds. d. net proceeds and the fair value of the bonds. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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