S1: In a working paper elimination (in journal entry format) for the consolidated balance sheet of a parent company and its wholly owned subsidiary on the date of a business combination, the subtotal of the credits to the subsidiary’s stockholders’ equity accounts equals the current fair value of the subsidiary’s identifiable net assets. S2: In a completed working paper elimination (in journal entry format) for a parent company and its wholly owned subsidiary on the date of business combination, the total of the credits generally equals the parent company’s total cost of its investment in the subsidiary. A. Both statements are correct B. Only S2 is correct C. Only S1 is correct D. Both statements are incorrect
S1: In a working paper elimination (in journal entry format) for the consolidated balance sheet of a parent company and its wholly owned subsidiary on the date of a business combination, the subtotal of the credits to the subsidiary’s stockholders’ equity accounts equals the current fair value of the subsidiary’s identifiable net assets. S2: In a completed working paper elimination (in journal entry format) for a parent company and its wholly owned subsidiary on the date of business combination, the total of the credits generally equals the parent company’s total cost of its investment in the subsidiary. A. Both statements are correct B. Only S2 is correct C. Only S1 is correct D. Both statements are incorrect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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S1: In a working paper elimination (in journal entry format) for the consolidated balance sheet of a parent company and its wholly owned subsidiary on the date of a business combination, the subtotal of the credits to the subsidiary’s stockholders’ equity accounts equals the current fair value of the subsidiary’s identifiable net assets. S2: In a completed working paper elimination (in journal entry format) for a parent company and its wholly owned subsidiary on the date of business combination, the total of the credits generally equals the parent company’s total cost of its investment in the subsidiary.
A. Both statements are correct
B. Only S2 is correct
C. Only S1 is correct
D. Both statements are incorrect
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