Which of the following is a limitation of consolidated financial statements? Select one: A. The investor and investee may be in different industries, making comparisons difficult. B. Consolidated statements can mask the results of poorly performing subsidiaries. C. Segment disclosures are often too summarized for effective analysis. D. All of the above are limitations of consolidated statements

Question 20 Not yet answered Marked out of 3.00 Under the equity method, dividends declared by a subsidiary are accounted for by the parent as Select one: A. decrease in Equity Investment. B. increase in Equity Income. C. decrease in Equity Investment, but only if it is a liquidating dividend. D. dividend revenue

On January 1, 2019, Windy Meadows Corp. acquired a 10% interest in Jones Enterprises for $20,000. The stock has a readily determinable fair value, so the investor measures the Equity Investment at fair value with all unrealized gains and losses flowing through net income. On December 31, 2019 the fair value of the 10% common stock investment is $24,000. On April 1, 2020, Windy Meadows acquired an additional 20% Jones's common stock for $52,000 and gains the ability to exert significant influence over its investment and will begin to use the equity method for its investment. What is the amount of the unrealized holding gain or loss that would be required on April 1, 2020 to appropriately transition to the equity method? Select one: A. $ 6,000 B. $ 2,000 C. $-0- D. $12,000

When one company buys a controlling interest in another company on April 1 (assuming a calendar year). How should the pre-acquisition subsidiary revenues and expenses be disclosed in the consolidated balances for the year of acquisition?

Select one: A. Only post-acquisition revenues and expenses are included in consolidated totals on the financial statements, however, the revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period are included in supplemental pro forma information. B. Only post-acquisition revenues and expenses are included in consolidated totals. C. It is disclosed in consolidated retained earnings. D. It is combined with parent company income statement balances.