Assume that the fair value is greater than carrying amount at the date of acquisition for the
Question:
Assume that the fair value is greater than carrying amount at the date of acquisition for the subsidiary’s long-term debt with 10 years to maturity. Briefly explain whether this fact will increase, decrease or not change the debt-to-equity ratio when preparing the consolidated balance sheet at the date of acquisition and one year after the date of acquisition.
Step by Step Answer:
The debtto equity ratio will increase at the date of acquisition because ...View the full answer
Modern Advanced Accounting In Canada
ISBN: 9781260881295
10th Edition
Authors: Hilton Murray, Herauf Darrell
Related Video
This video is about ways to attempt consolidated balance sheet questions. since the unconsolidated financial statements of parent and subsidiary companies are prepared separately, consolidating the balance sheets of both companies is critical and sometimes becomes complex. the tutorial will guide students on to how questions on attempting questions on consolidated financial statements in an easier yet more effective way.
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