ACC 401 Week 7 Quiz 5
1. A Chapter 7 bankruptcy is a(n)
2. Which of the following is true concerning the treasury stock approach in accounting for a subsidiary's investment in parent company stock?
3. Which statement is false regarding a plan for reorganization?
4. Chase Company owns 80% of Lawrence Company and 40% of Ross Company. Lawrence Company also owns 30% of Ross Company. Separate operating incomes for 2013 of Chase, Lawrence, and Ross are $450,000, $300,000, and $250,000, respectively. Each company also retains a $20,000 unrealized gain in their current income figures. Annual amortization expense of $15,000 is assigned to Chase's investment in Lawrence and another $15,000 is assigned to Lawrence's investment in Ross.
5. Which of the following is not one of the more common reorganization plan elements?
6. Beagle Co. owned 80% of Maroon Corp. Maroon owned 90% of Eckston Inc. Operating income totals for 2013 are shown below; these figures contained no investment income. Amortization expense was not required by any of these acquisitions. Included in Eckston's operating income was a $56,000 unrealized gain on intra-entity transfers to Maroon.
7. A company that was to be liquidated had the following liabilities:
8. Delta Corporation owns 90 percent of Sigma Company, and Sigma owns 90 percent of Pi, Inc. all of which are domestic corporations. Information for the three companies for the year ending December 31, 2013 follows:
9. Tower Company owns 85% of Hill Company. The two companies engaged in several intra-entity transactions. Each company's operating and dividend income for the current time period follow, as well as the effects of unrealized gains. No income tax accruals have been recognized within these totals. The tax rate for each company is 30%
10. A company that was to be liquidated had the following liabilities:
11. Which one of the following is a requirement that must be met before an involuntary bankruptcy petition can be filed when there are at least 12 unsecured creditors?
12. On its balance sheet, a company undergoing reorganization should
13. How should liabilities (except for deferred income taxes) be reported by a company using fresh start accounting?
14. Which of the following statements is true regarding the subsidiary's investment in its parent's common stock?
15. A company that was to be liquidated had the following liabilities: