F4 - M7 - Consolidated Financial Statements

Question 1

The consolidated balance sheet includes 100 percent of the parent’s and subsidiary’s assets and liabilities (after eliminating intercompany transactions), but does not include the ___________.

Answer 1

subsidiary’s equity

Question 2

Noncontrolling interest is presented as part of ________, separately from the equity of the parent company.

Answer 2

equity

Question 3

The consolidated income statement includes 100 percent of the parent’s revenues and expenses and all of the subsidiary’s revenues and expenses after the date of acquisition. The subsidiary’s ______________ are not included in the consolidated income statement.

Answer 3

pre- acquisition income and expenses

Question 4

The statement of consolidated comprehensive income should show, separately, (3)

Answer 4

consolidated comprehensive income, comprehensive income attributable to the noncontrolling interest; comprehensive income attributable to the parent company.

Question 5

Because noncontrolling interest is part of the equity of the consolidated group, it is presented in the statement of changes in equity. The consolidated statement of changes in equity should present a reconciliation of (3)

Answer 5

1) reconciliation of the beginning-of-period and end-of-period carrying amount of total equity, 2) equity attributable to the parent, and 3) equity attributable to the noncontrolling interest.

Question 6

The following steps are necessary in order to prepare a consolidated statement of cash flows in the period of acquisition:

Answer 6

The net cash spent or received in the acquisition must be reported in the investing section of the statement of cash flows.

Question 7

The assets and liabilities of the subsidiary on the acquisition date must be added to the ____________ at the beginning of the year in order to determine the change in cash due to operating, investing, and financing activities during the period.

Answer 7

The assets and liabilities of the subsidiary on the acquisition date must be added to the parent’s assets and liabilities at the beginning of the year in order to determine the change in cash due to operating, investing, and financing activities during the period.