Question: Why does adding the parent s share of the increase in
Why does adding the parent's share of the increase in retained earnings of the subsidiary and the parent's retained earnings under the cost method result in consolidated retained earnings? Assume that there is no acquisition differential.
Answer to relevant QuestionsWhen the parent company uses the cost method, an adjustment must be made to its retained earnings on consolidation in every year after the year of acquisition. Why is this entry necessary? Why is a similar entry not required ...The retained earnings column in the statement of changes in equity shows dividends declared during the year. Do these dividends consist of the parent's, the subsidiary's, or both? Explain. Total Protection Limited (TPL) was incorporated on January 1, Year 1, by five homebuilders in central Canada to provide warranty protection for new-home buyers. Each shareholder owns a 20% interest in TPL. While most ...Balance sheet and income statement data for two affiliated companies for the cur rent year appear below. Additional Information • Albeniz acquired an 80% interest in Bach on January 1, Year 1, for $272,000. On that date ...On July 1, Year 5, Big purchased 80% of the outstanding common shares of Little for $122,080. On that date, Little's equipment had a fair value that was $21,600 less than carrying amount. The equipment had accumulated ...
Post your question