Chapter 3, Problem 52P

a.

To determine

Explain how the parent company's reported Investment Income for the year ended Dec

31, 2019 is assessed.

b.

To determine

Explain how the parent company's reported Equity Investment balance as of Dec 31,

2019 is assessed.

c.

To determine

Reconcile the pre-consolidation net income of the parent company to the consolidated

balance for the year ended 31 Dec 2019.

d.

To determine

Assess the retained earnings balance of the subsidiary as of the date of acquisition.

e.

To determine

Explain the reason why the consolidated balance sheet does not reflect the equity accounts of the subsidiary's stockholders.

f.

To determine

Prepare the consolidation entries for the year ended Dec 31, 2019.