On January 1, year 1 Rain acquires 90% of the stock in Snow in a transaction properly
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Question:
On January 1, year 1 Rain acquires 90% of the stock in Snow in a transaction properly accounted for as a business combination. Items 1 through 6 below refer to accounts that may or may not be included in Rain and Snow's consolidated financial statements. Click on the associated cell and select from the list below the treatment for those amounts to be reported in Rain's consolidated financial statements for the year ended December 31, year 2. Both Rain and Snow paid dividends to investors. Ignore income tax considerations.
Responses | |
1. Cash | |
2. Investment in subsidiary | |
3. Noncontrolling interest | |
4. Common stock | |
5. Beginning retained earnings | |
6. Dividends paid |
These are the answer options for each:
- Sum of amounts on Rain and Snow's separate unconsolidated financial statements.
- Less than the sum of amounts on Rain and Snow's separate unconsolidated financial statements but not the same as the amount on either.
- Same as amount for Rain only.
- Same as amount for Snow only.
- Eliminated entirely in consolidation.
- Shown in consolidated financial statements but not in separate unconsolidated financial statements.
- Neither in consolidated nor in separate unconsolidated financial statements.
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
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