to equipment with a remaining useful life of 10 years, and $250,000 to a patent with a remaining

useful life of 5 years.What is the acquisition accounting premium (AAP)? $5,500,000

Deferred profit on intercompany asset sales is always 100% eliminated.
Johnson Co. owns 70% of the voting common stock of Sandstone Corp. During 2021, Sandstone
had revenues of $2,400,000 and expenses of $1,600,000. The AAP amortization totaled $75,000
in 2021. What is the net effect of the inclusion of Sandstone on net income to the controlling
interests for 2021? $507,500

Assume the following facts are about a parent and its 75% owned subsidiary company:
Parent Subsidiary
Net income $200,000 $75,000
Common shares outstanding 45,000 30,000
(22,500 = 75% owned
by parent)
Convertible Preferred Stock Dividends = $25,000 Convertible into 5,000 shares of common
stock
Convertible Bonds Interest expense after tax
= $5,000
Convertible into 4,000
shares of common stock

What is the basic earnings per share? $5.14

Assume that Charlie Company owns 100% of Brown Corporation. Brown reports Stockholders’
Equity of $400,000. The Equity investment was acquired at book value (i.e., no AAP). Brown
sells a 20% interest to outsiders for $120,000. The entry made by Charlie as a result of the sale of
stock by Brown includes:
APIC credit, $ 16,000
Assume the following facts relating to an 80% owned subsidiary company:
BOY Stockholders' Equity $1,000,000
BOY unamortized AAP 125,000