When a Parent Uses the Partial Equity Method Throughout the Year

question 42

Multiple Choice

When a parent uses the partial equity method throughout the year to account for investment in a subsidiary,which of the following statements is false before making adjustments on the consolidated worksheet?

• A)Parent company net income will equal controlling interest in consolidated net income when initial value,book value and fair value of the investment are equal
• B)Parent company net income will exceed controlling interest in consolidated net income when fair value acquired exceeds book value
• C)Parent company net income will be less than controlling interest in consolidated net income when fair value acquired exceeds book value
• D)Goodwill will be recognized if acquisition value exceeds fair value
• E)Subsidiary net assets are valued at their book values

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Definitions:

Neuron's Axon

The long, slender projection of a neuron that conducts electrical impulses away from the neuron's cell body.

Auditory Cortex

The part of the brain that is responsible for processing auditory information, situated in the temporal lobe and critical for interpreting sounds and language.

Temporal Lobes

Sections of the brain located on either side of the head, above the ears, involved in processing auditory information and encoding memory.

Primary Visual Cortex

The part of the brain in which visual information is processed.