Questions from Advanced Accounting

Q: Why does adding the parent's share of the increase in retained earnings

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...

Q: The net assets section of an NFPO's statement of financial position should

The net assets section of an NFPO's statement of financial position should be divided into three main sections. List the sections, and explain the reasons for each.

Q: A subsidiary was acquired in the middle of the fiscal year of

A subsidiary was acquired in the middle of the fiscal year of the parent. Describe the preparation of the consolidated income statement for the year.

Q: What are the initial entries on the working paper when the parent

What are the initial entries on the working paper when the parent has used the cost method to account for its investment?

Q: Is the impairment test for intangibles other than goodwill the same as

Is the impairment test for intangibles other than goodwill the same as the one used for goodwill? Briefly explain.

Q: When the parent has used the equity method, its net income

When the parent has used the equity method, its net income equals consolidated net income attributable to its shareholders, and its retained earnings equal consolidated retained earnings. However, the...

Q: A parent company's 75%-owned subsidiary declared and paid a dividend

A parent company's 75%-owned subsidiary declared and paid a dividend totaling $10,000. How would the parent company record this dividend under the equity method? Under the cost method?

Q: By which method, cost or equity, does IFRS require a

By which method, cost or equity, does IFRS require a parent company to record its investment in a subsidiary? Why?

Q: The retained earnings column in the consolidated statement of changes in equity

The retained earnings column in the consolidated 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...

Q: "An acquisition differential allocated to revalue the land of a subsidiary

"An acquisition differential allocated to revalue the land of a subsidiary on acquisition date will always appear on subsequent consolidated balance sheets." Do you agree? Explain.