How would the answer to problem (5) have been affected if the parent had applied the initial value method rather than the equity method?a. No effect: The method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.b. The consolidated Equipment account would have a higher reported balance.c. The consolidated Equipment account would have a lower reported balance.d. The balance in the consolidated Equipment account cannot be determined for the initial value method using the information given.

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Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.