If in the Consolidation Process the Investment in Subsidiary Account

question 12

Multiple Choice

If in the consolidation process the investment in subsidiary account is increased or decreased by the amount determined by the following calculation: $$\text { (Parent ownership percentage } ) \times ( \text { Current balance in subsidiary retained eamings minus the subsidiary's retained eamings balance on the date of acquisition } )$$ the investment account is being converted from

• A)cost to simple equity.
• B)cost to sophisticated equity.
• C)simple equity to sophisticated equity.
• D)simple equity to cost.