Question : 71. Often, the parent does not own 100% of the voting : 1245758

71. Often, the parent does not own 100% of the voting stock of a consolidated subsidiary. The parent refers to the owners of the remaining shares of voting stock as a  A. noncontrolling interest.B. nonconsolidated group.C. consolidated subsidiary.D. noninfluential interest.E. nonvoting interest.

72. The consolidated income statement shows A. all of the parent’s and the subsidiary’s revenues less all of the parent’s and the subsidiary’s expenses, plus or minus intercompany sales, expenses, gains, and losses, which equals consolidated income. B. The consolidated income statement shows the portion of this consolidated income to which the noncontrolling shareholders have a claim, typically an amount equal to the subsidiary’s net income multiplied by the noncontrolling shareholders’ ownership percentage.C. The consolidated income statement shows the portion of this consolidated income to which the parent company shareholders have a claim.D. all of the aboveE. none of the above

73. The usual criterion for preparing consolidated financial statements is voting control in the form of majority ownership of common stock. However, for some entities common stock ownership does not indicate control because the common stock of the entity lacks one or more of the economic characteristics associated with equity. U. S. GAAP refers to such entities as a _____ entity. A. variable interestB. special interestC. thinly capitalizedD. securitized financialE. nonsecuritized financial

74. The usual criterion for preparing consolidated financial statements is voting control in the form of majority ownership of common stock. However, for some entities common stock ownership does not indicate control because the common stock of the entity lacks one or more of the economic characteristics associated with equity. Which of the following is/are true? A. U. S. GAAP refers to such entities as a variable interest entity (VIE). B. If the invested equity is so small that the entity requires other financial support to sustain its activities, it meets the criteria for a variable interest entity.C. If the equity owners lack meaningful decision rights, it meets the criteria for a variable interest entity.D. choices a and b, onlyE. choices a, b, and c.

75. Consolidated financial statements are typically prepared when one company has A. accounted for its investment in another company by the equity method.B. significant influence over the operating and financial policies of another company.C. the controlling financial interest in another company.D. a substantial equity interest in the net assets of another company.E. All of these answer choices are correct.

76. Marley Company had the following portfolio of securities at the end of its first year of operations: 

Year-End

A

Trading

$18,000

$23,000

B

Trading

$25,000

$27,000

(1)

Provide the entry necessary to adjust the portfolio of securities to market value.

(2)

After adjusting the securities to market, Marley elects to reclassify Security B as an available-for-sale security. On the date of the transfer, Security B’s market value is $26,500. Provide the journal entry to reclassify Security B.

77. What role does management intent play in the accounting treatment of marketable equity securities?