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A Company sells inventory to C Corporation.

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* A Company sells inventory to C Corporation. Several months after the sale, C Corporation gains control of A Company in a purchase transaction. C still holds the inventory purchased from A. After examination of the transaction, it is determined that it was the result of arms'-length bargaining. For purposes of preparing consolidated statements, the transaction should be:
a. Eliminated from the consolidated entity's balances
b. Eliminated from A's reported balances but not from C's
c. Eliminated from C's reported balances but not from A's
d. Viewed as an arms'-length transaction and not eliminated
e. None of the above

* Which of the following is an adjustment to consolidated net income in computing diluted consolidated earnings per share (EPS)?

a. Shares of parent to be issued if dilutive securities are converted and options exercised
b. Shares held by parent times subsidiary diluted EPS
c. Weighted average of parent company shares outstanding
d. Percent ownership held by noncontrolling interest times income available to common shareholders of subsidiary
e. None of the above

* Which of the following is NOT an adjustment to consolidated net income in arriving at net cash provided by operating activities under the indirect method?
a. Dividend payments to noncontrolling shareholders
b. Depreciation expense resulting from the write-off of a purchase differential
c. Income assigned to noncontrolling interest
d. Gain on sale of land to a nonaffiliated
e. None of the above

* Which of the following is a characteristic of a remeasurement exchange gain or loss?
a. It is generally the result of an increase or decrease in net monetary assets that were remeasured from the exchange rate at the beginning of the period, or on the date of the generating transaction, to the current exchange rate at the end of the period
b. It is recognized as an exchange gain or loss in the current period
c. It causes debits and credits in the trial balance to be equal, but it can also be proven
d. All of the above
e. None of the above

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* A Company sells inventory to C Corporation. Several months after the sale, C Corporation gains control of A Company in a purchase transaction. C still holds the inventory purchased from A. After examination of the transaction, it is determined that it was the result of arms'-length bargaining. For purposes of preparing consolidated statements, the transaction should be:
a. Eliminated from the consolidated entity's balances
b. Eliminated from A's reported balances but not from C's
c. Eliminated from C's reported balances but not from A's
d. Viewed as an arms'-length transaction and not eliminated
e. None of the above

In the absence of evidence to the contrary, companies that have joined together in a business combination are viewed as having been separate and independent prior to the combination. Since the transaction has been determined to be the result of ...

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The solution explains some multiple choice questions relating to accounting

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Emerson Corporation: Throughput costing, absorption costing and variable costing

Emerson Corporation which uses throughput costing just completed its first year of operations. Planned and actual production equaled 10,000 units and sales total 9600 units at $72 per unit. Costs data for the year are as follows:

Direct material per unit $12.00
Conversion Costs
Direct Labor $45,000
Variable manufacturing overhead $65,000
Fixed manufacturing overhead $220,000
Selling and administrative costs
Variable per unit $8.00
Fixed $118,000

The company classifies only direct material as a throughput cost.

1. Compute the company's total cost for the year assuming that variable manufacturing costs are driven by the number of units produced and variable selling and administrative costs are driven by the number of units sold.

2. How much of this cost would be held in year-end inventory under (a) absorption costing (b) variable costing and (c) throughput costing.

3. How much of the company's total cost for the year would be included as an expense on the period's income statement under (a) absorption costing (b) variable costing and (c) throughput costing.

4. Prepare Emerson's throughput costing income statement.

5. Show the solution if the following information was changed: direct material cost is $11.00 per unit and the total direct labor cost is $46,000.

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