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 parent recording identical excess amortization as under equity method O Equity method results in the highest consolidated net income All methods result in an identical Investment balance on the parent's books Consolidated totals for all three methods will be identical O O O O

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 parent recording identical excess amortization as under equity method O Equity method results in the highest consolidated net income All methods result in an identical Investment balance on the parent's books Consolidated totals for all three methods will be identical O O O O

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a joint venture should be equity accounted in the consolidated financial statements of the investor company. Which statement below can be used to describe the Equity accounting method? Select one: O a. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for amortization over an agreed period of time. O b. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for amortization over an agreed period of time. O c. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for post-acquisition changes in the investor's share of the net assets of the investee. O d. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for post-acquisition changes in the investor's share of the…
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
Statement 1: Consolidated inventory on the statement of financial position is recorded at fair market value to the affiliated group. Statement 2: If the intercompany seller is the subsidiary, it is the subsidiary's income that needs adjustment. Which statement/s is TRUE?
Which of the following costs of a business combination can be included in the value charged to paid-in-capital in excess of par? direct and indiırect acquisition costs O direct acquisition costs direct acquisition costs and stock issue costs if stock is issued as consideration stock issue costs if stock is issued as consideration
Do not use negative signs with your answers below. Reconciliation of Cost to Equity Method Parent's pre-consolidation net income 401000 v Dividend Income 81000 v P% x Net income of subsidiary P% x AAP amortization 0 x Net income attributable to controlling interest $ 0 x b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales $ 12200000 v Cost of goods sold 8120000 v Gross profit 4080000 v Operating expenses 0 x Net income Net income attributable to noncontrolling interests 0 x Net income 0 x
When the parent's Investment in S account is eliminated in the consolidation process, what replaces this item on the consolidated financial statements? A) The acquisition-date fair values of S's net assets, adjusted for any post-acquisition amortization of Differential. B) The acquisition-date book values of S's net assets, adjusted for any post-acquisition amortization of Differential. C) The book value of S's net assets and S's beginning retained earnings only. D) Only the new goodwill generated from the transaction.
TRUE OR FALSE: Indicate whether the statements are true or false. 1. Assuming the parent acquired 100 percent of the subsidiary’s stock and there are no purchase differentials, the investment income recorded by the parent in the current period will equal the subsidiary’s current net income recognized subsequent to the acquisition date. 2.