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Question 1 The SEC requires the use of push-down accounting in some specific situations. Push-down accounting...

Question 1
The SEC requires the use of push-down accounting in some specific situations. Push-down accounting results in:

Group of answer choices

A. Goodwill recorded in the parent company separate accounts.

B. Eliminating subsidiary retained earnings and paid-in capital in excess of par.

C. Reflecting fair values in the subsidiary’s separate accounts.

D. Changing the consolidation worksheet procedure because no adjustment is necessary to eliminate the investment in subsidiary account.

Question 2
If the investment in subsidiary account is increased or decreased by the amount determined by the following calculation:

Parent ownership percentage X (current balance in the subsidiary’s retained earnings minus the subsidiary’s retained earnings balance on the date of acquisition) the investment account is being converted from:

a. Cost to simple equity

b. Cost to sophisticated equity

c. Simple equity to sophisticated equity

d. Simple equity to cost

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