Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 7, Problem 7.28.1P
To determine
Consolidated Income Statement
Consolidated Income statement is referred to as the financial statement in which the subsidiary company’s income and expenses are combined with parent company and form the consolidated income statement according to IAS 27.
: The correct one among four options.
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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
How is the portion of consolidated earnings to be assigned to the non-controlling interest in consolidated financial statements determined?A. The amount of the subsidiary’s earnings recognized for consolidation purposes is multiplied by the non-controlling interest percentage on the balance sheet date.B. The amount of consolidated earnings on the consolidated work papers is multiplied by the non-controlling interest percentage on the balance sheet date.C. The subsidiary’s net income is extended to the non-controlling interestD. The parent’s net income is subtracted from the subsidiary’s net income to determine the non-controlling interest.
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.
Chapter 7 Solutions
Advanced Financial Accounting
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Prob. 7.8QCh. 7 - Prob. 7.9QCh. 7 - Prob. 7.10Q
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Prob. 7.13QCh. 7 - Prob. 7.14QCh. 7 - Prob. 7.15QCh. 7 - Prob. 7.16QCh. 7 - Prob. 7.17QCh. 7 - Prob. 7.18AQCh. 7 - Prob. 7.1CCh. 7 - Prob. 7.2CCh. 7 - Prob. 7.3CCh. 7 - Prob. 7.4CCh. 7 - Prob. 7.5CCh. 7 - Prob. 7.1.1ECh. 7 - Prob. 7.1.2ECh. 7 - Prob. 7.1.3ECh. 7 - Prob. 7.1.4ECh. 7 - Prob. 7.1.5ECh. 7 - Prob. 7.2.1ECh. 7 - Prob. 7.2.2ECh. 7 - Prob. 7.2.3ECh. 7 - Prob. 7.2.4ECh. 7 - Prob. 7.2.5ECh. 7 - Prob. 7.2.6ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Transfer of Depreciable Asset at Year-End Pitcher...Ch. 7 - Prob. 7.9ECh. 7 - Sale of Equipment to Subsidiary in Current Period...Ch. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24PCh. 7 - Prob. 7.25PCh. 7 - Prob. 7.26PCh. 7 - Prob. 7.27PCh. 7 - Prob. 7.28.1PCh. 7 - Prob. 7.28.2PCh. 7 - Prob. 7.28.3PCh. 7 - Prob. 7.28.4PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33PCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.41AP
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- The noncontrolling interest share that appears in the consolidated income statement is computed as follows: Consolidated net income is multiplied by the noncontrolling interest percentage. The subsidiary’s income less amortization of fair/book value differentials is multiplied by the noncontrolling interest percentage. Subsidiary net income is subtracted from consolidated net income. Subsidiary income determined for consolidated statement purposes is multiplied by the noncontrolling interest percentage. The retained earnings that appear on the consolidated balance sheet of a parent company and its 60 percent–owned subsidiary are: Parent company’s retained earnings plus 100 percent of the subsidiary’s retained earnings Parent company’s retained earnings plus 60 percent of the subsidiary’s retained earnings Parent company’s retained earnings Pooled retained earningsarrow_forwardChoose 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.arrow_forwardFollowing the completion of a business combination in the form of a statutory consolidation, what is the balance in the new corporation’s Retained earnings account? A. The sum of the acquirer and acquiree retained earnings account balances. B. The acquirer retained earnings account balance C. Zero D. The acquiree retained earnings account balancearrow_forward
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