Which statement is false concerning a comparison of a parent's books and the consolidatedfinancial statements of the parent and its subsidiary, when the parent uses the complete equitymethod to report its investment in its subsidiary?The parent's net income equals consolidated net income.The parent's total assets are lower than consolidated total assets.O The parent's dividends for the year are lower than consolidated dividends.O The parent's retained earnings equals consolidated retained earnings.

Consolidation is the process of combining the assets, liabilities, and other financial elements of…

Which statement is false concerning a comparison of a parent's books and the consolidated financial statements of the parent and its subsidiary, when the parent uses the complete equity method to report its investment in its subsidiary? O The parent's net income equals consolidated net income. O The parent's total assets are lower than consolidated total assets. O The parent's dividends for the year are lower than consolidated dividends. O The parent's retained earnings equals consolidated retained earnings.

Which statement is false concerning a comparison of a parent's books and the consolidated financial statements of the parent and its subsidiary, when the parent uses the complete equity method to report its investment in its subsidiary? O The parent's net income equals consolidated net income. O The parent's total assets are lower than consolidated total assets. O The parent's dividends for the year are lower than consolidated dividends. O The parent's retained earnings equals consolidated retained earnings.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 4BCRQ

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How is non-controlling interest in the subsidiary’s net assets presented in the consolidated statement of financial position? a. Within equity but separately from the equity of the owners of the parents. b. Within equity as part of retained earnings. c. Any of these as a matter of accounting policy choice. d. As a mezzanine item between liabilities and equity.
Consolidated Retained Earnings include: A. Consolidated Net income less any dividends declared by either the parent or subsidiary B. Consolidated Net income less any dividends declared by the parent only. C. The Parent’s net income less any dividends declared by the parent. D. The parent’s net income plus its share of subsidiary’s income less any dividends declared by either the parent or the subsidiary.
If a parent company has controlling interest in a subsidiary which has no potentially dilutive securities outstanding, then in the calculation of consolidated diluted EPS, it will be necessary to Select one: a. only make an adjustment of subsidiary's basic earnings. b. replace the parent's equity in subsidiary earnings with the parent's equity in subsidiary's diluted EPS. c. make a replacement calculation in the parent's basic earnings for the EPS. d. only use the parent's common shares and shares represented by the parent's potentially dilutive securities.
True or False Pls indicate if the statements are true or false. 1. The dividends paid by the subsidiary are completely eliminated from the consolidated financial statements because only dividends paid to the parent company stockholders represent a distribution of consolidated net assets. 2. The worksheet eliminations remove the recognition of the investment in the subsidiary from the parent’s financial records. 3.
Which of the following statements regarding IFRS consolidated financial statements is/are correct: (i) An entity that has equity investments in one or more other entities is required to present consolidated financial statements (ii) A parent whose debt or equity instruments are not traded in a public market is not required to present consolidated financial statements (iii) Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entity
In consolidated financial statements, it is expected that: A. Retained earnings equals to the sum of controlling interest separate retained earnings and non-controlling interest separate retained earnings. B. Ordinary share equals to the sum of parent’s ordinary share and subsidiary’s ordinary share. C. Net income equals to the sum of the income distributed to the controlling interest and distributed to non-controlling interest. D. Dividends declared equals the sum of the total parent company’s declared dividends and the total subsidiary’s declared dividends.
Under the Cost Method A. The parent’s investment in the Subsidiary is recorded at cost and reduced by an excess dividends received from subsidiary. B. The parent’s investment in the subsidiary is recorded at cost, and never changed thereafter. C. The parent records its pro rata share of the subsidiary’s post-acquisition income as an increase to the investment account and reduces the investment account with its share of the dividends declared by the subsidiary. D. The parent records it pro rata share of the subsidiary’s cumulative earnings as an increase to the investment account and reduces the investment account with its share in the dividends declared by the subsidiary
Which of the following is true regarding consolidation of net income?A. Parent net income is decreased by the dividend income recognized due to declared bysubsidiary at full amount even if less than 100% ownership is acquired.B. Amortization of excess must be done to adjust net income of parent to arrive at parent netincome own operation.C. Adjusted net income of subsidiary is shared by Parent’s holding interest andnoncontrolling interest.D. Dividend declared by subsidiary is shared by Parent’s holding interest and noncontrollinginterest.
The following independent statements may be true or false. Discuss the circumstances whereby the statement is true and the circumstances whereby it is false. Dividends declared by a Group (which is shown as an appropriation in the Consolidated Statement of Changes in Equity) comprises dividends declared by the Parent and dividends declared by a Subsidiary to its Non-controlling Interests.
If a company uses the equity method to account for an investment in another company, which of the following is true? Income is combined proportionate to ownership. Income to the investing company consists of actual dividends, interest, or capital gains. All of the investee’s income is included in the investor’s income except for income relating to intra-entity transactions. Income of the investee is included in the investor’s income but reduced by any dividends paid to the investor.
Under the Cost Method The parent records its pro rata share of the subsidiary’s post-acquisition income as an increase to the investment account and reduces the investment account with its share of the dividends declared by the subsidiary. The parent’s investment in the subsidiary is recorded at cost, and never changed thereafter. The parent records it pro rata share of the subsidiary’s cumulative earnings as an increase to the investment account and reduces the investment account with its share in the dividends declared by the subsidiary The parent’s investment in the Subsidiary is recorded at cost and reduced by an excess dividends received from subsidiary.
Which statement is incorrect concerning the preparation of consolidated financial statements? A. When the reporting dates of the parent and a subsidiary are different, the difference shall be no more than six months. B. The financial statements of the parent and its subsidiaries shall be consolidated on a line by line basis nu adding together like items of assets, liabilities, equity, income and expenses. C. Consolidated financial statements shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances. D. Intragroup dividends shall be eliminated in full.