When a parent uses the equity method throughout the year to account for investme

Question

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

a. Parent company total assets equals consolidated total assets

b. Parent company net income equals Consolidated (controlling interest) net income

c. Parent company retained earnings equals consolidated retained earnings

d. Purchased Goodwill should be recorded in consolidated balance sheet.

e. Parent company dividends equals consolidated dividends

Explanation / Answer

Statement (e) is false. Parent company dividends do not equal to consolidated dividend as consolidated dividends will include dividend to Non Controlling interest also

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