Reference no: EM133070799

Questions -

Q1. Par owns 88.25% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $39,115. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $78,231. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.83%. How much after-tax intercompany gain or loss was realized during Year 4 from Par's sale of assets to Sub in Year 3?

a. $2,645

b. $2,714

c. $2,853

d. $2,575

e. $2,784

Q2. On January 1, 20X1, Par Inc acquires 80.49% of Sub Corp for $165,931 in cash. Immediately before the acquisition, the book value of Sub's identifiable net assets was $112,461 with a fair value of $126,289, while the book value of Par's net assets was $221237.00. What will be the amount of goodwill on the consolidated balance sheet immediately after the acquisition if the fair-value-enterprise (FVE) method is used?

a. $73,872

b. $75,869

c. $79,862

d. $71,876

e. $77,866