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QUESTION 1 What is the major difference between CH. 2 and CH 3 in consolidation? A. CH. 3 introduces the "investment" account for accounting books B.CH. 3 introduces consolidation entries [A] and [S]. We started to introduce the formula approach in CH. 3. D.CH. 3 introduces passage of time, which complicates the consolidation QUESTION 2 Based on the journal entries under equity method, we summarized the formula for investment account balance. The formula calculates A. "Investment" account balance in parent's accounting books B. "Investment" account balance in subsidiary's accounting books C.Consolidated Investment" account balance reported by parent company D. Consolidated "Investment" account balance reported by the subsidiary QUESTION 4 In chapter 2. we learnt that both consolidation entries (A) and [S] require us to plug in investment account to balance the entries. Which of the following additional consolidation entries we learnt in CH. 3 does not use this "plug-in" approach? A Entry 00 B. Entry [D] C. Entry (E) D. All of them require plugging in investment" QUESTION 5 Consolidation entry (Al in Ch. 3 recognizes (here, consolidation period refers to the accounting period covered by the consolidated financial statements, consolidation date refers to the last day of the consolidation period) A. Initial excess allocation Unamortized excess as of the beginning of the consolidation period B. Unamortized excess as of the consolidation date C. D. Accumulated excess amortization QUESTION 6 Which of the following is the correct formula for consolidated assets in Ch.2 and CH. 3. (1) Parent's B.V.+ Subsidiary's B.V. +unamortized excess as of consolidation date (2) Parent's B.V. - Subsidiary's B.V. +unamortized excess as of the beginning of the consolidation period (3) Parent's B.V. - Subsidiary's F.V. (4) Parent's B.V. ("here, consolidation period refers to the accounting period covered by the consolidated financial statements; consolidation date refers to the last day of the consolidation period) (4) and (1) B.(3) and (1) C.(3) and (2) D. (4) and (2) etion Status: QUESTION 3 In initial analysis, we compare the book values (B.V.) with fair values (F.V.) for both assets and liabilities. The excess of fair value over book value (the Column titled "difference" or "allocation" in our PPT) can be positive or negative depending on (1) which is larger (B.V. vs. F.V.) and (2) asset or liability. It can be summarized in the following matrix F.V. >B.V F.V. B.V F.V.

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