Question 6 How does the partial equity method differ from the equity method? A) In the total assets reported on the consolidated balance sheet. B) In the treatment of dividends. C) In the total liabilities reported on the consolidated balance sheet. D) Under the partial equity method, subsidiary income does not increase the balance in the parent's investment account. E) Under the partial equity method, the balance in the investment account is not decreased by amortization on allocations made in the acquisition of the subsidiary. Question 7 Parent Inc. acquired all of the outstanding common stock of Child Co. on January 1, 2012, for $257,000. Annual amortization of $19,000 resulted from this acquisition. Parent reported net income of $70,000 in 2012 and $50,000 in 2013 and paid $22,000 in dividends each year. Child reported net income of $40,000 in 2012 and $47,000 in 2013 and paid $10,000 in dividends each year. What is the Investment in Child Co. balance on Parent's books as of December 31, 2013, if the equity method has been applied? A) $286,000. B) $295,000. C) $276,000. D) $344,000. E) $324,000.
Question 6 How does the partial equity method differ from the equity method? A) In the total assets reported on the consolidated balance sheet. B) In the treatment of dividends. C) In the total liabilities reported on the consolidated balance sheet. D) Under the partial equity method, subsidiary income does not increase the balance in the parent's investment account. E) Under the partial equity method, the balance in the investment account is not decreased by amortization on allocations made in the acquisition of the subsidiary. Question 7 Parent Inc. acquired all of the outstanding common stock of Child Co. on January 1, 2012, for $257,000. Annual amortization of $19,000 resulted from this acquisition. Parent reported net income of $70,000 in 2012 and $50,000 in 2013 and paid $22,000 in dividends each year. Child reported net income of $40,000 in 2012 and $47,000 in 2013 and paid $10,000 in dividends each year. What is the Investment in Child Co. balance on Parent's books as of December 31, 2013, if the equity method has been applied? A) $286,000. B) $295,000. C) $276,000. D) $344,000. E) $324,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 6
How does the partial equity method differ from the equity method?
A) In the total assets reported on the consolidated balance sheet.
B) In the treatment of dividends.
C) In the total liabilities reported on the consolidated balance sheet.
D) Under the partial equity method, subsidiary income does not increase the balance in the
parent's investment account.
E) Under the partial equity method, the balance in the investment account is not decreased
by amortization on allocations made in the acquisition of the subsidiary.
Question 7
Parent Inc. acquired all of the outstanding common stock of Child Co. on January 1, 2012, for
$257,000. Annual amortization of $19,000 resulted from this acquisition. Parent reported
net income of $70,000 in 2012 and $50,000 in 2013 and paid $22,000 in dividends each year.
Child reported net income of $40,000 in 2012 and $47,000 in 2013 and paid $10,000 in
dividends each year. What is the Investment in Child Co. balance on Parent's books as of
December 31, 2013, if the equity method has been applied?
A) $286,000.
B) $295,000.
C) $276,000.
D) $344,000.
E) $324,000.
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