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For each of the following situations, select the best answerthat applies to consolidating financial information subsequent tothe acquisition date:

(A) Initial value method.

(B) Partial equity method.

(C) Equity method.

(D) Initial value method and partial equity method but notequity method.

(E) Partial equity method and equity method but not initialvalue method.

(F) Initial value method, partial equity method, and equitymethod.

_____1. Method(s) available to the parent for internalrecord-keeping.

_____2. Easiest internal record-keeping method to apply.

_____3. Income of the subsidiary is recorded by the parent whenearned.

_____4. Designed to create a parallel between the parent'sinvestment accounts and changes in the underlying equity of theacquired company.

_____5. For years subsequent to acquisition, requires the *Centry.

_____6. Uses the cash basis for income recognition.

_____7. Investment account remains at initially recordedamount.

_____8. Dividends received by the parent from the subsidiaryreduce the parent's investment account.

_____9. Often referred to in accounting as a single-lineconsolidation.

_____10. Increases the investment account for subsidiaryearnings, but does not decrease the subsidiary account for equityadjustments such as amortizations.

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Casey Durgan
Casey DurganLv2
28 Sep 2019

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