Under the Equity Method, which of the following statements is TRUE? The parent's investment in the...

 

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Under the Equity Method, which of the following statements is TRUE? The parent's investment in the subsidiary is recorded at cost and reduced by any dividends received from the subsidiary. The parent records its pro rata share of the subsidiary's post-acquisition income as an increase to the investment account and reduces the investment account with its share of the dividends declared by the subsidiary as well as any post- acquistion losses. The parent's investment in the subsidiary is recorded at cost, and only changed thereafter if there has been a permanent impairment in the value of the investment. The parent records its pro rata share of the subsidiary's retained earnings balance as an increase to the investment account or reduces the investment account by its share of any accumulated deficit of the subsidiary. Under the Equity Method, which of the following statements is TRUE? The parent's investment in the subsidiary is recorded at cost and reduced by any dividends received from the subsidiary. The parent records its pro rata share of the subsidiary's post-acquisition income as an increase to the investment account and reduces the investment account with its share of the dividends declared by the subsidiary as well as any post- acquistion losses. The parent's investment in the subsidiary is recorded at cost, and only changed thereafter if there has been a permanent impairment in the value of the investment. The parent records its pro rata share of the subsidiary's retained earnings balance as an increase to the investment account or reduces the investment account by its share of any accumulated deficit of the subsidiary.

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Answer The parent records its prorata share of subsidiarys post acqu... View the full answer