Consolidated Net Income Using the Equity Method for an Acquisition

question 88

Multiple Choice

Consolidated net income using the equity method for an acquisition combination is computed as follows:

• A) Parent company's income from its own operations plus the equity from subsidiary's income recorded by the parent.
• B) Parent's reported net income.
• C) Combined revenues less combined expenses less equity in subsidiary's income 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 income recorded by parent.
• E) All of these.

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Definitions:

Cross-sectional

A type of observational study that analyzes and compares data from a population, or a representative subset, at one specific point in time.

Time Series

A series of data points gathered or documented at consecutive time periods.

Nominal

Nominal refers to data that is categorized without a natural order or rank, simply identifying different types based on names or labels.

Ethnicity

Ethnicity refers to the social group a person belongs to, and identifies with, often based on cultural, religious, or national characteristics.