ACCY 410 Assignment #3 – Research Simulations

1) Magnus Co. controls Anand Co. and wants to prepare consolidated financial statements.
However, the controller of Magnus Co. did not study ACCY 410 course at the UIUC and does
not know whether the retained earnings of Anand Co. should (or should not) be reported in the
consolidated retained earnings, in the consolidated financial statements.

Research and cite a specific paragraph in the Accounting Standard Codification that can help
the controller to determine whether retained earnings of the subsidiary should be reported in the
consolidated retained earnings. Unless specifically requested, your response should not cite
implementation guidance and illustrations.

FASB ASC 810 - 10 - 45 - 2

2) On July 1, 2019, Pistons Co. acquired 100% of Suns Co. It is now December 31, 2019, and
Pistons is about to prepare its consolidated financial statements. The CFO of Pistons does not
know whether the 2019 consolidated income statement should include the financial results of
Suns for the full 2019 year or only from the acquisition date.

Research and cite a specific paragraph in the Accounting Standard Codification that can help
the CFO of Pistons Co. to determine from what point of time the subsidiary’s financial results
should be included in the consolidated income statement. Enter your response in the answer
fields below. Unless specifically requested, your response should not cite implementation
guidance.

FASB ASC 810 - 10 - 45 - 4

3) Lebron Co. acquired the entire outstanding shares of common stock of Cavaliers Co. On the
acquisition date the total fair value of net identifiable assets acquired (i.e., far value of
identifiable assets acquired and liabilities assumed) was greater than the consideration
transferred for the shares.

Research and cite a specific paragraph in the Accounting Standard Codification that can help
the company to determine how this difference should be recognized in the consolidated financial
statements. Unless specifically requested, your response should not cite implementation
guidance and illustrations.

FASB ASC 805 - 30 - 25 - 2

5 points each; Score two correct answers to get full credits