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For each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume all persons listed in the situations are members of the AICPA.
d. Brooke, an accounts payable clerk, must have her manager sign off on all checks over $10,000. Her manager is out of the office this week, so Brooke forges her manager’s signature to make sure the check is sent out on time.
Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the non-controlling interest at that date was determined to be$43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of$185,000. At December 31, 20X4, Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable.
Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.