Liquidating dividend equity method
Based on the information provided, what amount of total stockholder's equity will be reported in the consolidated balance sheet prepared on December 31, 20X4? A dividend declared by the investee in excess of its earnings in the current year. A dividend declared by the investee in excess of its earnings since acquisition by the investor. Any dividend declared by the investee since acquisition. A dividend declared by the investee in excess of the investee's retained earnings. Under the cost method of accounting for a stock investment, the differential: A.
The company whose stock is owned is called the subsidiary company.A parent company uses the equity method to account for its investment in its subsidiary.When financial statements are prepared, the assets and liabilities (balance sheet), revenues and expenses (income statement), and cash flows (cash flow statement) of both the parent company and subsidiary company are combined and shown in the same statements. The investor's share of the investee's extraordinary items should be reported. The investor's share of the investee's prior-period adjustments should be reported. Continued use of the equity-method even if continued losses results in a zero or negative balance in the investment account.
The main pronouncement on equity-method reporting, APB 19 (ASC 323 and 325) requires all of the following except: A. An equity security is an investment in stock issued by another company.