Choose the letter of the correct answer. 1. Which of the following is not correct with regard to a parent’s ownership of 100 percent of a subsidiary’s stock subsequent to a book value acquisition? A. Consolidated Investment in Subsidiary balance equals the parent’s Investment in Subsidiary balance B. Consolidated Retained Earnings equals the parent’s Retained Earnings C. Consolidated dividends equal the parent’s dividends D. Consolidated net income equals the parent’s net income
Choose the letter of the correct answer. 1. Which of the following is not correct with regard to a parent’s ownership of 100 percent of a subsidiary’s stock subsequent to a book value acquisition? A. Consolidated Investment in Subsidiary balance equals the parent’s Investment in Subsidiary balance B. Consolidated Retained Earnings equals the parent’s Retained Earnings C. Consolidated dividends equal the parent’s dividends D. Consolidated net income equals the parent’s net income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Choose the letter of the correct answer.
1. Which of the following is not correct with regard to a parent’s ownership of 100 percent of a subsidiary’s stock subsequent to a book value acquisition?
A. Consolidated Investment in Subsidiary balance equals the parent’s Investment in Subsidiary balance
B. Consolidated Retained Earnings equals the parent’s Retained Earnings
C. Consolidated dividends equal the parent’s dividends
D. Consolidated net income equals the parent’s net income
2. What amount of allocated excess/purchase differential amortization is recognized in the parent’s financial records subsequent to the subsidiary’s acquisition?
A. The noncontrolling interest percentage ownership in the subsidiary
B. 100 percent of the purchase differential amortization
C. Allocated excess/purchase differentials are not amortized
D. The parent percentage ownership in the subsidiary
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