Under the direct method, what values should be entered for the assets, liabilities, and shareholders' equity to start the consolidation process? A) Carrying values for both the parent and the subsidiary companies B) Carrying values for the parent company and fair values for the subsidiary company C) Fair values for the parent company and carrying values for the subsidiary company D) Fair values for both the parent and the subsidiary companies 1) In consolidating parent-founded subsidiaries, what account is used to offset the parent company's "Investment in Subsidiary" account? A) Retained earnings B) Goodwill C) No offset is necessary D) Paid-in-capital accounts 5) Thivan Ltd. is a wholly owned subsidiary of Bateman Co. Thivan has declared dividends of $100,000. Under the equity method, what entry should Bateman record on its books? 100,000 100,000 A) DR Investment in Thivan CR Dividend income B) DR Investment in Thivan CR Equity in earnings of Thivan C) DR Dividends receivable CR Investment in Thivan 100,000 100,000 100,000 100,000 D) No entry is required until the dividends are paid. On December 31, 20X5, CI Co. purchased 100% of the outstanding common shares of SA Ltd. for $1,500,000 in cash; 80% of the cash was obtained by issuing a five-year note payable. The statements of financial position of Cl and SA immediately before the acquisition and issuance of the notes payable were as follows (in 000s): CI SA Book Value $ Fair Value $ Book Value $ Fair Value $ Cash 360 360 200 200 Accounts Receivable 520 500 380 380 Inventory 800 880 400 450 Prop. Plant & Equipment 1,820 2,000 1,420 1,520 Total 3,500 2,400 Current Liabilities 380 380 260 260 Long term liabilities 1,200 1,200 1,000 1,030 Common shares 500 600 Retained Earnings 1,420 540 Total 3,500 2,400 13) On the consolidated statement of financial position at December 31, 20x5, SA's common shares amount that would be included is D) $500 C) $1,100 A) 0 B) $600