A subsidiary owns shares of its parent company. Which of the following is true concerning the treasury stock approach?a. It is one of several options to account for mutual holdings available under current accounting standards.b. The original cost of the subsidiary’s investment is a reduction in consolidated stockholders’ equity.c. The subsidiary accrues income on its investment by using the equity method.d. The treasury stock approach eliminates these shares entirely within the consolidation process.
A subsidiary owns shares of its parent company. Which of the following is true concerning the treasury stock approach?a. It is one of several options to account for mutual holdings available under current accounting standards.b. The original cost of the subsidiary’s investment is a reduction in consolidated stockholders’ equity.c. The subsidiary accrues income on its investment by using the equity method.d. The treasury stock approach eliminates these shares entirely within the consolidation process.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter14: Intercorporate Investments In Common Stock
Section: Chapter Questions
Problem 8Q
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A subsidiary owns shares of its parent company. Which of the following is true concerning the
a. It is one of several options to account for mutual holdings available under current accounting standards.
b. The original cost of the subsidiary’s investment is a reduction in consolidated stockholders’ equity.
c. The subsidiary accrues income on its investment by using the equity method.
d. The treasury stock approach eliminates these shares entirely within the consolidation process.
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