On 1/1/ 2018,P Co acquired 75% of K Co common stock at an amount equal to its book value Selected balance sheet data at December 31, 2018, are as follows:

P Co K Co

Total Assets 210,000 90,000

Liabilities 60,000 30,000

Common Stock 50,000 25,000

Retained Earnings 100,000 35,000

In consolidated balance sheet at 31/12/ 2018, what amount should P co report as common stock ?

Select one: a. 57,000 b. 100,000 c. 75,000 d. 50,000

Under the equity method of accounting, a parent company's journal entry to record income from the subsidiary includes a debit to the investment ledger account and a credit to income from subsidiary account.

Select one: True False

PCo,paid $50,000 fees to its accountants and lawyers in acquiring S Co. P co will treat the $50,000 as.

Select one: a. an expense for the current year. b. additional cost to investment on the consolidated balance sheet c. a reduction in additional paid-in capital d. a prior period adjustment to retained earnings.