Chapter 5, Problem 5.1C

Consolidation Worksheet Preparation
The newest clerk in the accounting office recently entered trial balance data for the parentcompany and its subsidiaries in the company’s consolidation program. After a few minutesof additional work needed to eliminate the intercompany investment account balances, he expressed his satisfaction at having completed the consolidation worksheet for 20X5. In reviewing the printout of the consolidation worksheet, other employees raised several questions, andyou are asked to respond.
Required
Indicate whether each of the following questions can be answered by looking at the data in theconsolidation worksheet (indicate why or why not):
a. Is it possible to tell if the parent is using the equity method in recording its ownership of eachsubsidiary?
b. Is it possible to tell if the correct amount of consolidated net income has been reported?
e. One of the employees thought the parent company had paid well above the fair value of net assets for a subsidiary purchased on January 1, 20X5. Is it possible to tell by reviewing theconsolidation worksheet?
d. Is it possible to determine from the worksheet the percentage ownership of a subsidiary held bythe parent?