Business combinations, major customer, foreign currency, exchange rate

#3. Principles for allocating the cost of a business combination re provided in SFAS 141, "Business Combinations.: When the fair value of a net assets acquired exceeds the total cost of the investment, the difference should be:

a. Applied pro rata to reduce, but not below zero, the amounts initially assigned to specific noncurrent assets of the acquired firm.
b. Treated as negative goodwill to be amortized over the period benefited, not to exceed 40 years.
c. Treated as goodwill and tested for impairment on an annual basis.
d. Allocated on a pro rata basis to the assets of the acquired firm.

#11. On January 1, 2004, Hygille, Inc., reports net assets of $880,000 although a building (with a 10-year life) having a book value of $330,000 is now worth $400,000. Nuyt Corporation pays $840,000 on that date for an 80 percent ownership in Hygille. On December 31, 2006, Hygille reports total expenses of $621,000 while Nuyt reports expenses of $714,000. What is the consolidated total expense balance?

a. $1,335,000
b. $1,339,000
c. $1,345,300
d. $1,340,600

#15. Which of the following items of information must be disclosed with regard to a major customer?

a. The identity of the customer.
b. The percentage of total sales derived from the major customer.
c. The operating segment making the sale.
d. The geographic area from which the sale was made.

#19. The foreign currency is the functional currency for a foreign subsidiary. At what exchange rate should each of the following accounts be translated:

a. Rent Expense
b. Dividends paid
c. Equipment
d. Notes Payable
e. Sales
f. Depreciation Expense
g. Cash
h. Accumulated Depreciation
i. Common Stock

20. On January 1, 2004, Dandu Corporation started a subsidiary in a foreign country. On April 1, 2004, the subsidiary purchased inventory at a cost of 120,000 local currency units (LCU). One-fourth of this inventory remained unsold at the end of 2004 while 40 percent of the liability from the purchase had not yet been paid. The exchange rates for $1 were as follows:

January 1, 2004 $1 = LCU 2.5
April 1, 2004 $1 = LCU 2.8
Average for 2004 $1 = LCU 2.7
December 31, 2004 $1 = LCU 3.0

What should be the December 31, 2004, Inventory and Accounts Payable balances for this foreign subsidiary as translated into U.S. dollars using the current rate method?