Statement 1: In a business combination resulting a parent company-wholly owned subsidiary relationship, goodwill developed in the working paper elimination is attributed in its entirety to the parent. Statement 2: On the date of business combination of a parent company and its partially owned subsidiary, under the computation method used in full goodwill method, the amount assigned to minority interest in nest assets of subsidiary is based on the cost of the parent company’s investment in the subsidiary’s common stock. Statement 3: Consolidated net income is equal to the parent’s income from its net income under its Income Statement, plus the net income from each of the consolidated subsidiaries, adjusted for any differential write-off. Statement 4: It is useful to formulate eliminating entries in general form, because they are recorded in the general journal of the parent, to be sure that they balance before entering them in the working paper. Which statements above are correct?
Statement 1: In a business combination resulting a parent company-wholly owned subsidiary relationship,
Statement 2: On the date of business combination of a parent company and its partially owned subsidiary, under the computation method used in full goodwill method, the amount assigned to minority interest in nest assets of subsidiary is based on the cost of the parent company’s investment in the subsidiary’s common stock.
Statement 3: Consolidated net income is equal to the parent’s income from its net income under its Income Statement, plus the net income from each of the consolidated subsidiaries, adjusted for any differential write-off.
Statement 4: It is useful to formulate eliminating entries in general form, because they are recorded in the general journal of the parent, to be sure that they balance before entering them in the working paper.
Which statements above are correct?
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