If a Parent Company Has Controlling Interest in a Subsidiary

question 31

Multiple Choice

If a parent company has controlling interest in a subsidiary which has no potentially dilutive securities outstanding,then in the calculation of consolidated diluted EPS,it will be necessary to

• A)only make an adjustment of subsidiary's basic earnings.
• B)replace the parent's equity in subsidiary earnings with the parent's equity in subsidiary's diluted EPS.
• C)make a replacement calculation in the parent's basic earnings for the EPS.
• D)only use the parent's common shares and shares represented by the parent's potentially dilutive securities.

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Definitions:

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