Consolidation Subsequent to Acquisition

Question 1

What calculation can be used to calculate the amounts reported on the consolidated balance sheet?

Answer 1

(Parents accounts + Subs Accounts + Fair Value Increment- Intercompany balances)

Question 2

What calculation can be used to calculate the amounts reported on the consolidated income statement?

Answer 2

(P entire year + S since acquisition - Depreciation fair value increment)

Question 3

T/F: If the cost method is used, the parent will record it’s share of dividends but not income or loss from the sub?

Answer 3

True– Dividends declared will be recognized by the parent and it will be eliminated.