Question

QUESTION 1

1. An economic advantage of a business combination includes

		Acquiring duplicative assets
		Creating redundant management teams
		Coordinating marketing campaigns
		Duplicating integrative marketing chains

QUESTION 2

1. 
   

The consolidation process is performed

		each year since the entries are recorded in the journal and ledger only by the parent company
		each year since the entries are recorded in the journal and ledger only by the subsidiary company
		each year since the entries are recorded in the journal and ledger by both the parent and subsidiary company
		each year, since the consolidation entries are not recorded in the journal or ledger by either the parent or the subsidiary

5 points   

QUESTION 3

1. 
   

A sign of significant influence in accounting for equity investments would be:

		shared management, employees or technology between investee and investor
		shared external auditor.
		larger ownership percentage by outside parties.
		large decrease in market price per common share

5 points   

QUESTION 4

1. 
   

An arm's length transaction, that would be reflected in consolidated financial statements would include

		a loan to the company president of the subsidiary
		the purchase of material from an oversees supplier
		the sale of no longer needed fixed assets to the subsidiary
		the sales of inventory to a subsidiary

Answer 1

The following are the answers for the above mentioned questions.

Question 1) Coordinating marketing campaigns.

Question 2) Each year since the entries are recorded in the journal and ledger only by the parent company.

Question 3) Shared management, employees or technology between investee and investor.

Question 4) The sales of inventory to a subsidiary.