Lowell owns 80% of Boston. At the end of the year when Lowell consolidates with Boston,...
Lowell owns 80% of Boston. At the end of the year when Lowell consolidates with Boston, which of the following statement is true?
Multiple Choice
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Parent company net income equals consolidated net income.
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Total Equity equals parent's stockholders' equity.
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Parent company total assets equals consolidated total assets.
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Parent company's reported net income equals consolidated net income minus consolidated net income attributable to NCI.
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Goodwill is recorded on the parent’s books
Homework Answers
Option (d) is correct. When the subsidiary is not fully owned, consolidated net income is divided into two components: consolidated net income attributable to controlling interests and consolidated net income attributable to non - controlling interests. Parent company's reported net income equals consolidated net income minus consolidated net income attributable to NCI
Option (a) is incorrect. Parent company net income do not equals consolidated net income.
Option (b) is incorrect. Total Equity do not equals parent's stockholders' equity.
Option (c) is incorrect. Parent company total assets do not equals consolidated total assets.
Option (e) is incorrect. Goodwill is not recorded on the parent’s books.
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Lowell owns 80% of Boston. At the end of the year when Lowell
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controlling and noncontrolling interest was $300,000 in excess of
the subsidiary’s Stockholders’ Equity on the acquisition date. This
excess was assigned to a building that was estimated to be
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Preparing a consolidated income statement—Cost method
with noncontrolling interest, AAP and upstream and downstream
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A parent company purchased a 70% controlling interest in its
subsidiary several years ago. The aggregate fair value of the
controlling and noncontrolling interest was $300,000 in excess of
the subsidiary’s Stockholders’ Equity on the acquisition date. This
excess was assigned to a building that was estimated to be
undervalued by $180,000 and to an unrecorded Trademark valued at
$120,000. The building asset...
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Assume a parent company acquired a subsidiary on January 1,
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