Which account balance is always reported at the same amount on the parent's balance sheet and on the consolidated balance sheet of the parent and its subsidiary?

Cash and receivables

Retained earnings

long-term debt

equity method investments

The elimination entry is not entered in the general ledger.

True False

Companies are motivated to consolidate highly leverage subsidiaries.

True False

Consolidated retained earnings at the end of the year equals

Beginning retained earnings of the parent plus condolidated net income less declared dividends of the parent and the subsidiary.

Beginning retained earnings of the parent plus consolidated net income less declared dividends of the parent.

Beginning retained earnings of the parent plus beginning retained earnings of the subsidiary, plus consolidated net income less declared dividends of the parent and the subsidiary.

Beginning retained earnings of the parent plus consolidated net income and consolidated other comprehensive income, less declared dividends for the part and the solve.

A parent acquires all of the voting stock of a subsidiary. The acquisition cost is less than the fair value of the subsidiarys identifiable net assets. Which statement below is true concerning the consolidation working paper eliminations at the date of acquisition?

Elimination (E) credits investment for the book value of the subsidiary.

Elimination (R) credits gain on acquisition for the difference between acquisition cost and the fair value of the subsidiarys identifiable net assets.

Elimination (E) credits gain on acquisition for the difference between acquisition cost and the fair value of the subsidiarys identifiable net assets.

Elimination (R) debits goodwill for the difference between acquisition cost and the fair value of the subsidiarys identifiable net assets.

Goodwill is assigned to reporting units and is subject to _____________ testing. Goodwill impairment losses appear in the _______________ section of the consolidated income statement.

Which one of the following balances appears on consolidated financial statements?

Dividends, reported on the subsidiarys books

Investment in subsidiary, reported on the parents books

Plant assets, reported on the subsidiarys books

Goodwill previously reported on the subsidiarys books

ABC acquires 49.99% of the voting stock of XYZ. From the viewpoint of readers of the financial statements, the most important factor ABC should consider when deciding whether or not to consolidate XYZ on its financial statements is

whether ABC follows IFRS or U.S. GAAP.

whether ABC controls the performance of XYZ

ABCs percentage ownership of XYZs stock

whether consolidation will make it harder for ABC to borrow money.