On January 1, 2018, a subsidiary bought 10% of the outstanding shares of its parent company. Although the total book value and fair value of the parent's net assets were $5.5 million, the consideration transferred for these shares was $590,000. During 2018, the parent reported separate net income of $714,000, before including investment income, while dividends declared were $196,000. How were these shares reported at December 31, 2018?
A. The investment was recorded for $590,000 at the end of 2013 and then eliminated for consolidation purposes.
B. Consolidated stockholders' equity was reduced by $641,800.
C. Consolidated stockholders' equity was reduced by $639,800.
D. The investment was recorded for $641,800 at the end of 2013 and then eliminated for consolidation purposes.
E. Consolidated stockholders' equity was reduced by $590,000.
Answer: E
You might also like to view...
________ are people within a group who exert the greatest influence on the attitudes and behaviors of members of the group
A) Opinion leaders B) Motivators C) Social networkers D) Reinforcers E) Word-of-mouth marketers
Positive word-of-mouth advertising from a company's delighted customers is more effective than an advertising campaign developed by a company
Indicate whether the statement is true or false
The discovery stage of a civil case includes:
a. the filing of a counterclaim by the defendant. b. depositions and subpoenas. c. the defendant requesting, and receiving, a jury trial. d. All of the choices are true of the discovery stage of a civil case.
Which of the following sections of the statement of cash flows includes activities that affect net income on the income statement?
A) the financing activities section B) the operating activities section C) the investing activities section D) the non-cash investing and financing section