3. Uni, a parent company with five wholly owned operating subsidiaries, is in the process of preparing consolidated financial statements for the year. Two of Uni’s subsidiaries are operating as debtors in possession under Chapter 11 of the bankruptcy act. Which of the following statements is correct?

a ASC Topic 810, “Consolidation,” prohibits Uni from consolidating the financial statements of the two subsidiaries in bankruptcy with those of the other affiliated companies.

b ASC Topic 810, “Consolidation,” requires that the financial statements of all five of the subsidiaries be consolidated with those of the parent company.

c If Uni’s consolidated financial statements include the operations of the two subsidiaries in bankruptcy, ASC Topic 852 requires that condensed combined financial statements for all entities in reorganization be presented as supplementary financial statements.

d If Uni’s consolidated financial statements do not include the operations of the two subsidiaries in bankruptcy, those subsidiaries must be accounted for under the cost method.