When consolidating a subsidiary that was acquired on a date other than the first day of the fiscal year, which of the following statements is true in the presentation of consolidated financial statements?

1. Purchased preacquisition earnings are added to the beginning consolidated stockholders' equity.
2. Purchased preacquisition earnings are added to combined revenues and expenses.
3. Purchased preacquisition earnings are deducted from the beginning consolidated stockholders' equity.
4. Purchased preacquisition earnings are deducted from combined revenues and expenses.
5. Purchased preacquisition earnings are ignored on the consolidated income statement