Which one of the following statements is correct with regards to a 70%-owned subsidiary?100% of the parent’s retained earnings will be added to 100% of the subsidiary’s retained earnings at consolidation, in the statement of changes in equity.100% of the parent’s assets will be added to 70% of the subsidiary’s assets at consolidation, in the statement of financial position.100% of the parent’s retained earnings will be added to 70% of the subsidiary’s retained earnings at consolidation, in the statement of changes in equity. The retained earnings of the subsidiary will be allocated to the non-controlling interests in total.

Merger & Acquisition refers to the process of gaining ownership in the other organization by…

Answered: Which one of the following statements…

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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Which one of the following statements is correct with regards to a 70%-owned subsidiary?

100% of the parent’s retained earnings will be added to 100% of the subsidiary’s retained earnings at consolidation, in the statement of changes in equity.
100% of the parent’s assets will be added to 70% of the subsidiary’s assets at consolidation, in the statement of financial position.
100% of the parent’s retained earnings will be added to 70% of the subsidiary’s retained earnings at consolidation, in the statement of changes in equity.
The retained earnings of the subsidiary will be allocated to the non-controlling interests in total.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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