In an acquisition where 100% control is acquired, how would the land accounts of the parent and the land accounts of the subsidiary be reported on consolidated financial statements? Parent A) Book Value B) Book Value C) Fair Value D) Fair Value E) Cost Multiple Choice Option A. Option B. Option C. Subsidiary Book Value Fair Value Fair Value Book Value Cost

In an acquisition where 100% control is acquired, how would the land accounts of the parent and the land accounts of the subsidiary be reported on consolidated financial statements? Parent A) Book Value B) Book Value C) Fair Value D) Fair Value E) Cost Multiple Choice Option A. Option B. Option C. Subsidiary Book Value Fair Value Fair Value Book Value Cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Assume on July 1, 2022, a parent company paid $1,656,000 to purchase an 80% interest in a…

A: The Goodwill is the amount of purchase consideration paid in excess of fair value of net…

Q: If the fair value of a subsidiary's land was $100,000 and its book value was $90,000 when the parent…

A: The fair value method in accounting is an approach used to measure and report the value of financial…

Q: Calculate the goodwill on consolidation from the information below: Parent’s cost of investment in…

A: Goodwill is an intangible asset which may be purchased or self-generated. It also arises when the…

Q: What percentage of the intercompany loss on plant asset sale should be used to adjust consolidated…

A: Introduction: To present the Consolidated financial statement, the effect of transactions between…

Q: What is true about the choice by the parent as to whether to use the equity, partial equity or…

A: It is known the when the parent company acquires 50% or more of the voting rights of a company then…

Q: Measurement of Goodwill A parent has purchased a 100% interest in a subsidiary for $30,000. On the…

Q: A parent acquires the outstanding bonds of a subsidiary company directly from an outside third…

A: Describe whether the gain should be allocated to the parent or the subsidiary: The gain of $45,000…

Q: What method must be used if FASB 94 prohibits full consolidation of a 70% owned subsidiary?

A: FASB 94 - This Statement amends ARB No. 51, Consolidated Financial Statements, to require…

Q: Starting from the separate inventory balances of the affiliates, the consolidated inventory balance…

A: At the time of consolidation, inventory is recorded at the fair value so any difference in the fair…

Q: (a) Where the parent company does not hold 100 percent equity of the subsidiary company, what…

A: Intragroup transactions:- These transactions are recorded in the books of two companies that belong…

Q: amount would the land be included in the consolidated balance sheet immediately after the…

A: The fair value method in accounting assesses assets and liabilities at their current market value,…

Q: You are working on a consolidated trial balance of a parent and an 80% owned subsidiary. What…

Concept explainers

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.

Question

an acquisition where 100% control is acquired, how would the land accounts of the parent and the land accounts of the subsidiary be reported on
consolidated financial statements?
Parent
A) Book Value
B) Book Value
C) Fair Value
D) Fair Value
E) Cost
Multiple Choice
Option A.
Option B.
Option C.
Subsidiary
Book Value
Fair Value
Fair Value
Book Value
Cost

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:

VIEW

Step 2: Land accounts to be recorded in consolidated financial statement:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,200,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipment with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent and subsidiary have the following balance sheets immediately after the acquisition, but before any pushdown adjustments by the subsidiary: Parent Subsidiary Assets: Cash & receivables $ 800,000 $ 100,000 Inventory 600,000 200,000 Property & equipment, net 2,300,000 775,000 Equity investment 1,200,000 Licenses 25,000 $ 4,900,000 $1,100,000 Liabilities and stockholders' equity: Current liabilities $ 400,000 $ 150,000 Other liabilities 300,000 Note payable 350,000 Common stock 1,670,000 100,000 APIC 1,430,000 200,000 Retained earnings 1,100,000 300,000 $4,900,000…
TRUE OR FALSE 1. Subsequent to the date of acquisition worksheet elimination number 1 will not completely remove the Investment in Subsidiary account from the consolidated balance sheet. 2. The consolidation worksheet will only eliminate all of the Investment in Subsidiary account when the parent owns 100 percent of the subsidiary’s stock. 3.
What is true about the choice by the parent as to whether to use the equity, partial equity or initial value methods for its investment in its consolidated subsidiary. Partial equity method has the parent record excess amortization All methods result in the same Investment balance on the parent's books Consolidated totals for all three methods will be identical Equity method results in the highest consolidated net income
The goal of the consolidation process is for asset acquisitions and 100% stock acquisitions to result in the same balance sheet goodwill to appear on the balance sheet of the consolidated entity the assets of the noncontrolling interest to be predominately displayed on the balance sheet O the investment in the subsidiary to be properly valued on the consolidated balance sheet
X and Y corporations enter in legal consolidation process. The net assets of x at the FMV 120000 and the net assets of Y at the FMV 80000. Y will be considered as ... a. Combinee b. Lessor c. Lessee d. Combinor
Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,700,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipment with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent and subsidiary have the following balance sheets immediately after the acquisition, but before any pushdown adjustments by the subsidiary: Parent Parent Subsidiary Assets: Cash & receivables $ 800,000 $ 350,000 Inventory 600,000 200,000 Property & equipment, net 2,300,000 1,025,000 Equity investment 1,700,000 Licenses - 275,000 $ 5,400,000 $ 1,850,000 Liabilities and stockholders' equity: Current liabilities $ 400,000 $ 400,000 Other liabilities 300,000 - Note payable - 600,000 Common stock 1,670,000…