Choose the correct. A company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. For internal reporting purposes, the company has decided to apply the initial value method. Why might the company have made this decision?a. It is a relatively easy method to apply.b. Operating results appearing on the parent’s financial records reflect consolidated totals.c. GAAP now requires the use of this particular method for internal reporting purposes.d. Consolidation is not required when the parent uses the initial value method.

Q: When we are preparing consolidated financial statements, will we have to eliminate the parent…

A: The parent company will report the investment in subsidiary as it's asset in books of accounts. But…

Q: . what is the basis for consolidation? 2. is goodwill being remeasured to fair value at each…

A: Consolidated financial statements refer to that financial statement that reflects the overall…

Q: One company purchases the outstanding debt instruments of an affiliated company on the open market.…

A:

Q: In the business combination of Polka and Spot Select one: a. all of the costs except those of…

A: Common acquisition-related costs addressed in  Business Combinations are: Legal Accounting and due…

Q: The following independent statements may be true or false. Discuss the circumstances whereby the…

A: Goodwill on Acquisition: For the purposes of accounting, goodwill is created when a buyer purchases…

Q: A company acquires a subsidiary and will prepare consolidated financial statements for external…

A: The correct answer is Option (1).

Q: Key questions to consider when determining the appropriate consolidation adjustment entries include…

A: Consolidation adjustment entry is the accounting entry that is to be made for consolidating the…

Q: Which of the following is NOT true with regard to the statutory consolidation form of business…

A: Business combination is a form of arrangement or agreement between two or more than two entities in…

Q: Which most accurately describes what happens to consolidation worksheet entries, assuming there is…

A: Consolidated worksheet is prepared to combine the books of parent and subsidiary. The entries made…

Q: 1: The preparation of consolidated financial statements after acquisition is materially different…

A: Statement 1 is correct as consolidated financial statements are prepared for the parent company who…

Q: What principle(s) from the conceptual framework does Henday Limited use in each of the following…

A: Conceptual framework is a concept with several variations and contexts.It basically helps you to…

Q: Choose the correct. What is push-down accounting?a. A requirement that a subsidiary must use the…

A: The use of push-down accounting is made, when the parent company has acquired ownership of more than…

Q: the accounting valuations for the post -control step acquisitions to the Berkshire Hathaway…

A: Warren Buffett has appeared to be round for appropriate strategies to guess Berkshire Hathaway's…

Q: The worksheet eliminations prepared subsequent to acquisition remove the allocated excess/purchase…

A: As per our protocol we provide solution to the one question only but as you have asked two multiple…

Q: A company has included in its consolidated financial statements this year a subsidiary acquired…

A: Change in reporting entity:It refers to a change when two (or) more entities comprise together into…

Q: Which statement is true regarding consolidation when there is a noncontrolling interest?…

A: When a company is holding shares of a company of more than 50% of outstanding share . Then the…

Q: When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In…

A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.

Q: Why must the eliminating entries be entered in the consolidation worksheet each time consolidated…

A: 1. Elimination is used to delete a partnership in another partnership, whether from a parent to a…

Q: In situations where there are routine inventory sales between parent companies and subsidiaries,…

A: Consolidation of parent company and subsidiary company.

Q: cess of preparing Consolidated Financial Statements involves the elimination of intercompany…

A: In subsidiary account and parent company account there are common transaction which are to be dealt…

Q: At acquisition date, the net assets of the acquired subsidiary are included in the consolidated…

A: The IAS 10  deals with the consolidation of financial statements. The process of consolidating the…

Q: Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE…

A: SOLUTION A- The fair value of the equipment at the date of acquisition : $2,000,000 The book value…

Q: Prepare the set of consolidated financial statement of financial position on the date of acquisition…

A: Consolidated financial statements comprise of the group financial statements in which the…

Q: If a revaluation of the subsidiary’s assets is performed on consolidation, the subsidiary’s assets…

A: The subsidiary company is the company acquired by the holding or parent company with purchase of…

Q: Restructuring provisions Are generally not recognized as part of business combination unless the…

A: Restructuring provisions means provisions for estimated cost of reorganisation of a company at the…

Q: When an entity sells a non-current asset at a profit to another entity within the same group, which…

A: Consolidation is the process in which parent company prepares financial statement with both parent…

Q: Which of the following is not true with regard to a business combination accomplished in the form of…

A: Business combination through stock acquisition occurs when there is an acquisition of the target…

Q: At acquisition date, the net assets of the acquired subsidiary are included in the consolidated…

A: Whenever the assets are purchased by the business entity, it is recorded in the books of accounts at…

Q: In a business combination - stock acquisition, difference between current fair values and book…

A: Business Combination: In a business combination, the acquirer gains ownership of another firm via a…

Q: Choose the correct. A subsidiary has a debt outstanding that was originally issued at a discount. At…

A: Parent company is a company which has controlling interest in other company by having owned voting…

Q: When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the…

A: Consolidated financial statements: When an investor company holds above 50% in the outstanding stock…

Q: The entry to cancel the effects of the intercompany transactions in preparation of the Consolidated…

A: Introduction:- Financial transactions Between parent company and its subsidiaries are treated as…

Q: Which of the following is incorrect regarding consolidated financial statements?

A: Consolidation is the acquisition of a smaller company by a large company. When a company acquires…

Q: Which of the following is correct? A. The noncontrolling shareholders' claim on the subsidiary's…

A: The question is related to Consolidation.

Q: A bargain purchase arises when the price paid to acquire a controlling interest in another company…

A: A bargain purchase arises when an acquirer gains control of an acquiree whose fair value of net…

Q: What is push-down accounting?a. A requirement that a subsidiary must use the same accounting…

A: Push-down accounting: Its a book keeping method used by companies when they buy out another firm. In…

Q: Which consolidation method should be used in preparing consolidated financial statements in…

A: To achieve the objective of having common accounting language all over the world, The International…

Q: Which of the following statements is incorrect concerning the preparation of consolidated financial…

A: For preparation of consolidated financial statements:   1. Uniform accounting policies to be applied…

Q: Choose the correct. Which of the following is the best theoretical justification for consolidated…

A: Consolidated financial statements:   When an investor company holds above 50% in the outstanding…

Q: Describe the consolidation procedure that will be applied to account for the sale of an asset…

A: IFRS 10 was issued in 2011. The objective of IFRS 10 is to prepare consolidated financial statements…

Q: Which of the following statements is not correct in relation to consolidation accounting key terms?…

A: Parent and subsidiary are two types of companies. Parent company is that company who has control…

Q: Which of the following is incorrect regarding measurement period? a. If the initial accounting for…

A: Measurement period refers to the one year period that the variable hour employee's weekly measured…

Q: The goal of the consolidation process is for asset acquisitions and 100% stock acquisitions to…

A: Consolidation is the process where one company acquires another company by taking off the assets,…

Q: In a share acquisition business combination resulting in a parent- subsidiary relationship, the…

A: The consolidated worksheet includes the book value of parent and subsidiary accounts along with the…

Q: Based on the information provided below, prepare appropriate consolidation journal entries for…

A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…

Q: Key questions to consider when determining the appropriate consolidation adjustment entries include…

A: Consolidation of the financial statement is a process of combining the financial statements of the…

Q: When two proprietors decide to combine their businesses, generally accepted accounting principles…

A: The accounting standards state that when two businesses are coming together to work as a single…

Q: When we are preparing consolidated financial statements, will the financial statements of the parent…

A: Consolidation is a term used for merging of several companies of an industry. The assets,…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.