F4 M7 Consolidated FS

Question 1

When consolidating balance sheets, only include liabilities of subs that the parent controls more than _% of the sub.

Answer 1

50%

Question 2

At the date of acquisition, the consolidated equity will be equal to the ______ plus the fair value of any noncontrolling interest. The subsidiary company’s equity accounts are ______.

Answer 2

Parent’s stock holders equity

Eliminated

Question 3

Consolidated financial statements of a parent and a WHOLLY OWNED sub company: Total retained earnings should be

Answer 3

The same as the parent company retained earnings

Question 4

Consolidated financial statements of a parent and a WHOLLY OWNED sub company: Net income should be

Answer 4

The same as the parent company net income

Question 5

Purchased subsidiary’s shareholders’ equity as of the date of the acquisition is _____ in consolidation

Answer 5

Eliminated

Question 6

When given the fair value and book value of both the parents’ assets and the subs’ assets, how do you calculate the consolidated assets value?

Answer 6

The Fair Value of the subs assets + the Book Value of the parents’ assets