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.

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Definitions:

Medium-term Solution

A strategy or response designed to address a problem or challenge which is effective for a moderate time frame, typically ranging from a few months to a few years.

Communication

The process of exchanging information, ideas, or feelings between individuals or groups, through various channels and mediums.

Employee Participation

The involvement of employees in the decision-making process of an organization, contributing ideas, suggestions, and feedback.

Workforce Reduction Strategy

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