Question: At the date of an 80 acquisition a subsidiary had
At the date of an 80% acquisition, a subsidiary had common stock of $100,000 and retained earnings of $16,250. Seven years later, at December 31, 2013, the subsidiary's retained earnings had increased to $461,430. What adjustment will be made on the consolidated workpaper at December 31, 2014, to recognize the parent's share of the cumulative undistributed profits (losses) of its subsidiary? Under which method(s) is this adjustment needed? Why?
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