Consolidations - Changes in Ownership...
True or False
1
.
Dividends paid by the subsidiary prior to acquisition are eliminated for
consolidation purposes because they are not part of the equity acquired.
True
False
2
.
If a parent company increases its interest in a subsidiary from 60% to 65%
during the course of an accounting period, minority interest on the
consolidated financial statements prepared at year end would reflect a
minority interest of 35%.
True
False
3
.
If a parent company sells shares that were acquired through several
different purchases, the last-in-first-out method is generally used to
determine the cost basis of the shares.
True
False
4
.
When a parent company sells an interest in the subsidiary during the
middle of an accounting period, the total impact on the parent company's
net income is the same regardless of whether the sale is recorded as of the
beginning of the year or as of the date of sale.
True
False
5
.
When a subsidiary corporation sells additional shares, the parent
company's books must be adjusted to reduce the additional paid-in-capital
and investment account balance for the change in underlying equity.
True
False