What effect does a subsidiary purchase have on the consolidated balance sheet?
E) There is no effect on the consolidated balance sheet, because the effects have been eliminated. C) Consolidated stockholders' equity is reduced by $350,000. On January 1, 2018, a subsidiary buys 12 percent of the outstanding voting stock of its parent corporation.
How would consolidated earnings per share be calculated if the subsidiary?
How would consolidated earnings per share be calculated if the subsidiary has no convertible securities or warrants? Consolidated net income divided by parent's number of shares outstanding.
What is the effect of stock warrants on diluted EPS?
No effect is created because the stock warrants were for the subsidiary company's shares. b. The stock warrants are not included in the computation unless they are anti-dilutive. c. The effect of the stock warrants must be computed in deriving the amount of subsidiary income to be included in making the diluted EPS calculation.
Does a subsidiary issue new shares of common stock?
A subsidiary issues new shares of common stock at an amount below book value. Outsiders buy all of these shares. Which of the following statements is true? The parent's additional paid-in capital will be decreased. A subsidiary issues new shares of common stock.
Where does the noncontrolling interest in Stage's net income appear on a consolidated statement of cash flows?
Where does the noncontrolling interest in Stage's net income appear on a consolidated statement of cash flows? Noncontrolling interest in Stage's net income does not appear on a consolidated statement of cash flows.
Which of the following characteristics is not indicative of an enterprise qualifying?
Which of the following characteristics is not indicative of an enterprise qualifying as a primary beneficiary with a controlling financial interest in a variable interest entity? No ability to make decisions about the entity's activities.
What is pro rata consolidation?
Pro Rata Consolidation Method means the pro rata method of consolidation as fully reconciled to GAAP and as reported on each Form 8-K that is furnished by the Parent (or on its behalf) to the Securities and Exchange Commission.
Can a wholly owned subsidiary be a VIE?
The key thing with a VIE is that if they're properly structured, the company is allowed to consolidate the operations of the VIE with the parent company as if it owned it as a wholly-owned subsidiary. That was a really important thing for these companies to be able to list abroad.
When did Riley Corp buy bonds?
On January 1, 2011, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying value of $421,620, and Riley paid $401,937 for them.
When did Matthews buy the bonds?
On January 1, 2011, when there was an unamortized discount of $2,000 and a remaining life of 5 years, its 80% owned subsidiary, Matthews Company, purchased the bonds in the open market for $11,000. The bonds pay 6% interest annually on December 31. The companies use the straight-line method to amortize interest revenue and expense.