Consolidated Net Income Using the Equity Method for an Acquisition

question 66

Multiple Choice

Consolidated net income using the equity method for an acquisition combination is computed as follows:

• A) Parent company's revenues from its own operations plus subsidiary retained earnings.
• B) Parent's reported net income plus subsidiary dividends.
• C) Combined revenues less combined expenses less equity in subsidiary's earnings less amortization of fair-value allocations in excess of book value.
• D) Parent's revenues less expenses for its own operations plus the equity from subsidiary's earnings less subsidiary dividends.
• E) None of these answer choices are correct.

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Definitions:

Internal Validity

The extent to which a study can establish a cause-and-effect relationship free from external influences or confounding variables.

Simple Interrupted Time-Series Design

A research design analyzing data collected at regular intervals over time to determine the effect of an intervention.

Intervention of the Series

A sequence of actions or experimental manipulations designed to investigate the effects of those actions on a subsequent process or outcome.

Control Point

A specific point or condition in a process or experiment that is used as a standard for comparison or to ensure consistency.