In Reporting Consolidated Earnings Per Share When There Is a Wholly

question 108

Multiple Choice

In reporting consolidated earnings per share when there is a wholly owned subsidiary, which of the following statements is true?

• A) Parent company earnings per share equals consolidated earnings per share when the equity method is used.
• B) Parent company earnings per share is equal to consolidated earnings per share when the initial value method is used.
• C) Parent company earnings per share is equal to consolidated earnings per share when the partial equity method is used and acquisition-date fair value exceeds book value.
• D) Parent company earnings per share is equal to consolidated earnings per share when the partial equity method is used and acquisition-date fair value is less than book value.
• E) Preferred dividends are not deducted from net income for consolidated earnings per share.

---

Definitions:

Dominant Strategy

A strategy that is the best for a player in a game regardless of the strategies chosen by other players.

Nash Equilibria

An idea in game theory that states a player cannot gain an advantage by altering their strategy while others maintain theirs.

Maximin Strategy

In decision-making, a strategy that maximizes the minimum gain that can be achieved, often used under conditions of uncertainty to minimize possible losses.

Dominant Strategy

In game theory, a strategy that is best for a player regardless of the strategies chosen by other players.