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:

Sequence

An ordered collection of elements or steps followed in a specific order.

Iteration

The repetition of a process or set of instructions in programming, typically implemented with loops, to systematically approach a desired outcome.

Sequence Structure

A set of code statements executed in order, one after the other, often used to describe the basic flow of a program.

Selection

The process of choosing between two or more paths in programming based on conditions, often implemented with if-else and switch statements.