Answer these questions about consolidated financial statements:

1. Why does consolidated shareholders’ equity (contributed capital + retained earnings) exclude the equity of a subsidiary corporation?

2. Suppose A Ltd. owns 90 percent of B Ltd. What are the remaining 10 percent of B Ltd.’s shares called, and where do they appear, if at all, in A Ltd.’s consolidated financial statements?

3. Suppose C Ltd. paid $2,000,000 to acquire D Ltd., whose shareholders’ equity (which has the same fair value as net assets) totalled $1,400,000. What is the $600,000 excess called? Which company reports the excess? Where in the consolidated financial statements is the excess reported?