The investment in a subsidiary should be recorded on the parent's books at the O underlying book value of the subsidiary's net assets O fair value of the subsidiary's net identifiahla arcota
Q: Compute for the Non-controlling Interest in Net Assets of Subsidiary as of December 31, 20x2.…
A: Non-controlling interest in a business means when shareholders are holding less than 50 % of the…
Q: Describe the difference between the economic entity concept and the parent company concept…
A: The concept of economic entity explains that the finances of an entity should be kept separate or…
Q: Amount to be shown as consolidated net income? Net income attributable to owners of the parent?…
A: The acquisition means the take over of a major portion of a business by another business to gain…
Q: 1. Which is true regarding the Investment in Subsidiary Stock account? A. It is accounted for in…
A: Here is the answer of your first question Let's understand the basic Investment in subsidiary stock…
Q: Which is true regarding the Non controlling interest? [a] It is accounted for in the subsidiary’s…
A: Non-controlling interest is also known as a minority interest. Minority interest means held…
Q: In computing the noncontrolling interest’s share of consolidated net income, how should the…
A: Upstream sales: The sale which is made by the subsidiary to parent is called upstream sales.…
Q: Under the Cost Method A. The parent’s investment in the Subsidiary is recorded at cost and…
A: The answer for the multiple choice question and relevant explanation are presented hereunder :
Q: Determine the Non-controlling interest in Net assests of subsidiary
A: The interest in which the parent company shares are hold by the subsidiary to the extent of only…
Q: You are required to prepare the consolidated statement of financial position as at 31 December x7.…
A: Generally the value of the selling company shall be calculated in different methods like Net asset…
Q: S1: In a working paper elimination (in journal entry format) for the consolidated balance sheet of a…
A: A business which gains control over the other business is called an acquirer and the business which…
Q: The Investment in a Subsidiary should be recorded on the parent’s books at the A. Fair value of the…
A: Acquisition: It is a case, when all or majority stocks of a company is purchased by another…
Q: In preparing the Subsidiary company's Income distribution schedule (IDS), how is the total amount…
A: Non Controlling Interest (NCI) In the simple term Non controlling interest which indicates that…
Q: Dividends Dividends from a subsidiary, associate or joint venture are recognized in profit or loss…
A: The investment in subsidiary, joint venture and associates can be accounted by any of the following…
Q: Statement 1: Current fair value of the investment adjusted for dividends received describes the…
A: The investment in a subsidiary in the separate financial statement is recognized at a cost or fair…
Q: . Which of the following entries appear on the parent company’s books to account for its investment…
A: Solution Note : Dear student as per the Q&A guideline we are required to answer the first…
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: Which of the following is an example of a transaction where a parent’s ownership interest in a…
A: Transactions that will change the ownership interest in subsidiary but not the controlling…
Q: When there is a dividend payable by the subsidiary at acquisition date, under what conditions should…
A: Pre-acquisition entries: Pre-acquisition entries are required to keep 'investment in subsidiaries'…
Q: Statement I: During the measurement period, the acquirer shall prospectively adjust the provisional…
A: Measurement period :- Measurement period is the period after the acquisition date during which the…
Q: ecorded in the applicable asset and liability accounts of the parent
A: Business combination refers to a transaction in which the acquirer has complete control over the…
Q: at acquisition date net assets of a subsidiary company are included in the consolidated financial…
A: The IAS 10 deals with the consolidation of financial statements. The process of consolidating the…
Q: Determine the percentage of outstanding voting shares of the subsidiary acquired by the parent.
A: Calculating total fair value from the purchase cost and Non Controlling Interest fair value.…
Q: How is the non-controlling interest (NCI) in the subsidiary’s profit or loss presented in the…
A: Non controlling interest is the interest a shareholder has in a company where he holds less than 50%
Q: (a) Where the parent company does not hold 100 percent equity of the subsidiary company, what…
A: Parent Company: When a company has controlling interest over the operations of another company the…
Q: According to AASb 10/IFRS 10, an investment in a subsidiary is not consolidated and must be measured…
A: As per IFRS 10, an entity that is concerned with providing the investment services to several…
Q: PUMASA AKO Company and its subsidiaries own the following properties that are accounted for in…
A: IAS 40 Investment Property applies to the accounting for property i.e. land or buildings or both…
Q: Under the equity method of accounting for the operating results of a subsidiary, the dividends…
A:
Q: According to Section 19: Business Combinations and Goodwill, the acquirer measures non- controlling…
A: According section 19: Business combination and goodwill, the acquirer measures non controlling…
Q: S1: In a business combination resulting in a parent company-wholly owned subsidiary relationship,…
A: In a business combination, goodwill arises from paying extra consideration over the net identifiable…
Q: The parent company records its share of subsidiary’s income by A. Crediting Investment in Subsidiary…
A: The value strategy is a bookkeeping procedure utilized by an organization to record the benefits…
Q: a parent company acquires a less-than-100 percent controlling interest in a subsidiary, what portion…
A: Controlling interest in a subsidiary refers to acquiring between 50% to less than 100% of the…
Q: Determine the non-controlling interest in net assets of subsidiary in the year 20x6
A: Non-controlling interest is the is the ownership position of the holder with minority shares in the…
Q: At the date of purchase, business combination resulting in a parent-subsidiary relationship, the…
A: Parent subsidiary relationship means when one company acquires substantial amount of shares in other…
Q: Consolidated Net Income is equal to: Multiple Choice the sum of the net incomes of both the parent…
A: Consolidated financial statements are prepared for two companies, in which one is parent company and…
Q: Using the acquisition method for a business combination, goodwill is generally defined as Select…
A: Using the acquisition method for a business combination goodwill is defined as the investment cost…
Q: ing entity remains the company's performar the parent's financia
A: To find the correct option as,
Q: In a business combination resulting in a parent company-subsidiary relationship, the parent…
A: .Elimination entries allow the presentation of all account balances as if the parent and its…
Q: S1: Current fair value of the investment adjusted for dividends received describes the amount at…
A: S1: Current fair value of the investment adjusted for dividends receiveddescribes the amount at…
Q: Choose the correct. In computing the noncontrolling interest’s share of consolidated net income, how…
A: Upstream sales: The sale which is made by the subsidiary to parent is called upstream sales.…
Q: PUMASA AKO Company and its subsidiaries own the following properties that are accounted for in…
A: As per IAS 40, Investment property is an asset that is held with an intention to gain rentals or…
Q: Choose the letter of the correct answer: 1. What amount of allocated excess/purchase differential…
A: Acquisition Differential is excess the fair value of acquisition entity over its recorded equity.
Q: S1: Current fair value of the investment adjusted for dividends received describes the amount at…
A: Under the cost method of accounting for investments, the investment in subsidiary is recorded at…
Q: S1: In a working paper elimination (in journal entry format) for the consolidated balance sheet of a…
A: The correct option is:- Only S1 is correct
Q: In preparing the Subsidiary company's Income distribution schedule (IDS), how is the total amount…
A: Income distribution schedule is the frequency of scheduled distributions of dividends or capital…
Q: Compute for the consolidated net income attributable to parent shareholders' equity and amount of…
A: A Co. acquired 60% ordinary shares in B Co. on 2nd Jan' 2022. We are given the statement of…
Q: The investment in subsidiary should be recorded on the parent’s book at?
A: The financial statements are prepared at the end of an accounting year to calculate the financial…
Q: much is the non controlling interest in the net assets of the subsidiary on december 31,2021
A: Non Controlling interest will be enthusiasm for an organization whereby the organization claims…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- In the separate financial statement of the parent company, which of the following statements concerning the different accounting treatment for investment in subsidiary is correct? a. Under equity method, cash or property dividend received shall be recognized as dividend income by the parent. b. Under cost method, the transaction cost directly attributable to acquisition of the investment shall be expensed as incurred. c. Under fair value model, the parent company shall recognize share in net income from the subsidiary. d. Regardless of the method, the investment in subsidiary account shall be presented as noncurrent asset in the parent’s separate statement of financial position.Given the following information, how is goodwill from a business combinationcomputed under PFRS 3? A = Consideration transferred; B = Non-controllinginterest in net assets of subsidiary; C = Previously held equity interest; D = Fairvalue of net identifiable assets of subsidiary; % = Percentage of ownershipacquired by the parent in the subsidiary A. (A+B) – [(D x %) – B]B. A – (D x %)C. (A+C) – (D x %)D. A+B+C-DIf the entity is using the equity method to account for investment in subsidiary, the entry to recognize dividends received from the subsidiary will: a.Be recognized in profit or loss b.Increase the carrying amount of investment c.Decrease the carrying amount of investment d.Be recognized in other comprehensive income
- Given the following information, how is goodwill from a business combination computed under PFRS (IFRS) 3? A = Consideration transferred; B = Non-controlling interest in net assets of subsidiary; C = Previously held equity interest; D = Fair value of net identifiable assets of subsidiary; % = Percentage of ownership acquired by the parent in the subsidiary a. A – (D x %) b. A+B+C-D c. (A+C) – (D x %) d. (A+B) – [(D x %) – B]Which of the following is correct? A. The noncontrolling shareholders' claim on the subsidiary's net asset is based on the book value of the subsidiary's net assets. B. Only the parent's portion of the differences between book value and fair value of the subsidiary's assets is assigned to those assets. C. Goodwill represents the difference between the book value of the subsidiary's net assets and the amount paid by the parent to buy ownership. D. Total assets reported by the parent generally will be less than the total assets reported on the consolidated balance sheet.At the date of purchase, business combination resulting in a parent-subsidiary relationship, the difference between current fair values and carrying amounts of the subsidiary’s net asset is: A. Recorded in the applicable asset and liability accounts of the parent company B. Reflected in a consolidation elimination C. Recorded in the applicable asset and liability accounts of the subsidiary D. Accounted for in some other manner.
- Choose the correct. In computing the noncontrolling interest’s share of consolidated net income, how should the subsidiary’s net income be adjusted for intra-entity transfers? a. The subsidiary’s reported net income is adjusted for the impact of upstream transfers prior to computing the noncontrolling interest’s allocation. b. The subsidiary’s reported netincome is adjusted for the impact of all transfers prior to computing the noncontrolling interest’s allocation. c. The subsidiary’s reported net income is not adjusted for the impact of transfers prior to computing the noncontrolling interest’s allocation. d. The subsidiary’s reported net income is adjusted for the impact of downstream transfers prior to computing the noncontrolling interest’s allocation.In computing the noncontrolling interest’s share of consolidated net income, how should the subsidiary’s net income be adjusted for intra-entity transfers?a. The subsidiary’s reported net income is adjusted for the impact of upstream transfers prior to computing the noncontrolling interest’s allocation.b. The subsidiary’s reported net income is adjusted for the impact of all transfers prior to computing the noncontrolling interest’s allocation.c. The subsidiary’s reported net income is not adjusted for the impact of transfers prior to computing the noncontrolling interest’s allocation.d. The subsidiary’s reported net income is adjusted for the impact of downstream transfers prior to computing the noncontrolling interest’s allocation.1. Which of the following entries appear on the parent company’s books to account for its investment in subsidiary? [a] Credit to intercompany dividends [b] Credit to the parent company’s share in the net income of the subsidiary [c] Amortization and depreciation of differences between fair values and book values of net assets of subsidiary at acquisition date [d] All of the above 2. Which is true regarding the Investment in Subsidiary Stock account? [a] It is accounted for in the parent’s books and is included as non – current assets in the parent’s balance sheet [b] It is not included in the consolidated balance sheet of parent and subsidiary [c] It is decreased and or increased by the difference between fair value and book value of net assets of the subsidiary for consolidation purposes. [d] All of the above
- In the consolidated statement of comprehensive income to be prepared by the parent corporation, which of the following items will affect both consolidated net income attributable to parent and non-controlling interest in net income? Impairment loss on goodwill recognized when the noncontrolling interest is measured at proportionate share of fair value of net assets of subsidiary. Amortization of difference between fair value and book value of liability of subsidiary. Realization of unrealized gain or (loss) from sale of parent company to subsidiary company. Recognition of gain on bargain purchase arising from business combination.S1: Current fair value of the investment adjusted for dividends received describes the amount at which a parent company reports its investment in a Subsidiary under the cost method for periods subsequent to the business combination. S2: Under the cost method of accounting for investment, depreciation and amortization of the allocated difference between the fair values and book values of acquired subsidiary’s identifiable net assets is debited to the Subsidiary’s expense accounts, in the working paper. Only S1 is correct Both statements are correct Both statements are incorrect Only S2 is correctAt the date of acquisition, business combination resulting in a parent-subsidiary relationship, the difference between current fair values and carrying amounts of the subsidiary’s net assets is: Group of answer choices Recorded in the applicable asset and liability accounts of the subsidiary Reflected in a consolidation elimination Ignored and not accounted for Accounted for in some other manner Recorded in the applicable asset and liability accounts of the parent