Advance Acct #3
consolidation entry A adjusts the subsidiary's assets to there unamortized acquisition-date fair value as of what date?
Beginning of the current Year (current reporting period)
Under the initial value method, the parent records income when the subsidiary declares a ______
Dividend
A parent company over time will routinely make which of the following adjustments in applying the equity method to its investment subsidiary account
Dividends from the subsidiary. Income as it is earned and reported by the subsidiary. Excess acquisition-date Fair value OVER Book value amortization.
compare 3.5 and 3.9
- No differences in consolidation totals across the 2 exhibits - Consolidation entries S, A, & E are the same across the 2 exhibits
How do the consolidation worksheets compare across Exhibit 3.5 vs. Exhibit 3.9 and Exhibit 3.10? wrong answers: -net income is the same for all 3 -investment into Sun Company acct balances as the same for all 3
- No differences in consolidation totals across the 3 exhibits - Consolidation entries S, A, & E are the same across the 3 exhibits
Depending on the investment accounting method chosen, which of the following accounts would vary on the Parent's financial records? -Retained earnings -income From the subsidiary -Sales Revenue -Investment account
-Retained earnings -income From the subsidiary -Investment account
When the parents applies the Equity Method, which of the following worksheet entries helps to eliminate the investment in subsidiary account balance in consolidation? A D S I P
A, D, S, I
Under the partial equity method the parent records dividends from its subsidiary as
A Reduction in the invtmt (INVesTMenT) account
Which of the following Exhibit 3.4 income statement accounts are eliminated for consolidated financial statement reporting?
Equity in subsidiary earnings
Consolidation entry Adjusts subsidiary balances for the acquisition-date related excess _________ value adjustments as part of the consolidation process.
FAIR
Under the initial value method, no recognition is given to the income earned by the_________.
Subsidiary
Which of the following is a characteristic of the partial equity method of accounting for a parent company's investment in a subsidiary company
The parent company accrues income as reported by the subsidiary
which of the following represents components of subsidiary income recognized when a parent applies the partial equity method?
The parents share of the subsidiary's reported income
Three alternative methods of investment accounting available to the parent for its internal record-keeping... Regardless of its choice, the investment accounting method has no effect on the __________________ financial statements
consolidated
If a subsidiary company has a debt payable to its parent company, the intra-entity payable and receivable (on the parent's books) is removed as part of the ________ process.
consolidation
consolidated worksheets are typically used in the process of preparing consolidated financial statements required by GAAP. such worksheets utilize consolidation worksheet _________ to develop financial statement totals to be reported by the consolidated
entries
Consolidation entry E
increases expenses when excess fair over book value acquisition-date allocations are made to dep. subsid. assets. Provides current period amortization expense for the acquisition-date fair value adjtmts.
Consolidation entry D debits the "Investment in Subsidiary" account when
the parent employs the equity method to ... remove the dividends. The subsidiary has declared a current period cash dividend
consolidation entry S & A are part of a sequence of worksheets adjustments that bring ....
zero
regardless of whether the parent for its subsidiary investment using the Initial Value or Equity Method, consolidation worksheet entries bring the investment account to ________ balance
zero