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1. The Basic Consolidation Entry for Assignment 2 is identical to the Basic Consolidation Entry for Assignment 1. A. True B. False 2. An overvalued asset adds to the unexplained amount of Identifiable Excess (in effect, increasing the amount of New Goodwill). A. True B. False 3. An undervalued asset reduces the unexplained amount of Ident ifiable Excess (in effect, decreasing the amount of New Goodwill). A. True B. False 3. The consolidation entry related to an overvalued asset includes a debit to that asset on the Consolidation Worksheet. A. True B. False 4. The consolidation entry related to an undervalued asset includes a debit to that asset on the Consolidation Worksheet. A. True B. False 5. What is meant by the term, "True/Adjusted" Net Income of the Subsidiary? A. The Subsidiary's Reported (="Book") Net Income - the Amortization of Excess Value. B. The Subsidiary's Reported (="Book") Net Income - Dividends. C. The Subsidiary's Reported (" D. The Subsidiary's Reported ( ="Book") Net Income + Dividends. 6. At year-end, S Co. reports $70,000 of net income. When P acquired the stock of S, inventory was overvalued by $12,000. All the inventory was sold by vear-end. S Co.'s true/adjusted net income to be included in the Consolidated Net Income is: A. $70,000 B. $82,000($70,000+$12,000) C. $58,000($70,000$12,000) 7. On 01/01/22,P Co. acquired 100% of S Co.'s stock for $600,000. For 2022,SC0. reported $70,000 of net income \& paid $30,000 in dividends. When P acquired the stock of S, inventory was overvalued by $12,000. All the inventory was sold by year-end. PC0.'s vear-end "Investment in S " G/L balance is: A. $600,000. B. $570,000($600,000$30,000). C. $640,000($600,000+$70,000$30,000). D. $652,000[$600,000+($70,000+$12,000)$30,000]

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