9/10 Chapter 3/2

Question 1

what needs to be eliminated

Answer 1

the parents investment account
the parents income from sub account
the subs equity accounts

Question 2

JE for equity pick up entry

Answer 2

inv in sub 100000

Income from sub 100000

Question 3

we eliminate equity because we

Answer 3

will double count the equity if we do

Question 4

basic elimination entry

Answer 4

common stock
APIC
RE(Beginning Balance)
Income from Sub
   Dividends Declared(subs)
   Investment in Sub

Question 5

watch on quizzes at what date you prepare the statements

Answer 5

it will say at acquisition or at a certain date

beginning balance means the beginning balance at the first of the year

Question 6

quiz

Answer 6

cost method, equity method, consolidation method the quiz will be mostly theory
difference between the cost method 
pickup entries on dividends, income etc.
goodwill impairment
No IFRS :)
show work you won't get full credit

Question 7

consolidated net income equals the

Answer 7

parents net income most of the time

Question 8

consolidated retained earnings equals the

Answer 8

parents retained earnings most of the time

Question 9

the optional Accumulated depr entry

Answer 9

is not optional
Debit Accum depre
Credit PP&E
we have to get rid of depreciation before acquisition

Question 10

we will adjust the assets to fair value

Answer 10

another entry

Question 11

consolidation with the cost method

Answer 11

hard

Question 12

cost consolidated net income

Answer 12

P + S - Sub’s Div = Cons