BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
1 views

Assume a parent has total assets of $6,000,000 and a subsidiary has total assets of $4,000,000. If the parent owns 70% of the subsidiary’s common stock, what amount of total assets will be reported on the consolidated balance sheet?

a. $10,000,000

b. $7,000,000

c. $6,000,000

d. $0, consolidation is not necessary

To determine

The amount of total assets that will be presented in the consolidated Balance sheet is to be determined.

Explanation

consolidated balance sheet  is defined as the one which presents the assets and liabilities of a parent company and all its subsidiaries on a single document, with no distinctions with regards to which items belong to which companies.

Investment account in the books of parent company is adjusted towards (1) the equity (70%) acquired of the subsidiary company (2) The excess of fair value over book value of the assets acquired (i.e. 70%) to the subsidiary company. Hence, entire investment account and Total assets of the acquiring company will remain intact i.e. $6,000,000

Subsidiary:

can be defined as subsidiary company or a daughter company...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the major elements of Herzbergs motivationhygiene theory?

Foundations of Business (MindTap Course List)

How would you model Question 6 with an OODM? (Use Figure 2.4 as your guide.)

Database Systems: Design, Implementation, & Management

What is data independence, and why is it lacking in file systems?

Database Systems: Design, Implementation, & Management

By what factor do you increase the resistance to bending (about yy axis) if you were to use W1876 beam over W83...

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

What defines the combustion chamber of a four stroke engine?

Automotive Technology: A Systems Approach (MindTap Course List)

The standard taper in most lathe tailstocks is the _______ taper.

Precision Machining Technology (MindTap Course List)

5. Identify the main components of an information system. What is a mission-critical system?

Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)

Convert 5 megawatts of power into BTU/hr, ft-lbs/s, and kJ/hr.

Fundamentals of Chemical Engineering Thermodynamics (MindTap Course List)

List the steps in the closing procedure in the correct order.

College Accounting (Book Only): A Career Approach

Briefly describe five limitations of financial statement analysis.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Explain how absolute advantage and comparative advantage differ.

Essentials of Economics (MindTap Course List)

BALANCE SHEET Which of the following actions are most likely to directly increase cash as shown on a firm's bal...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)