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10) On January 1, 20N9 Pathlon Corporation, at underlying book value. For which includes a gain from discont Pathlon used the equity method? A) SO B) $16,500 C) $4,500 D) $12,000 11) Consolidated financial statements tend to be most uweful fo A) Creditors of a consolidated subsidiary 13) Investors and long-term creditors of the parent company C) Short-term creditors of the parent company D) Stockholders of a consolidated subsidiary 12) Company Pea owns 90 percent of Company Essone which in turn owms to ecent od Company Esstwo. Company Esstwo owns 100 percent of Company Pssthree. Conesilbdated be prepared to report the financial status and resuls of operations A) Pea. B) Pea plus Essone. C) Pea plus Essone plus Esstwo. D) Pea plus Essone plus Esstwo plus Essthree 13) In which of the following cases would consolidation be Inappropriate? A) The subsidiary is in bankruptey B) Subsidiary's operations are dissimilar from those of the parent. C) The parent owns 90 percent of the subsidiary's common stock, but all of the sub nonvoting preferred stock is held by a single investor 14) On January 1, 20X8, Peta Company acquired 85 percent of Star Company for $100,000 cash. The fair value of the noncontrolling interest was determine of the book value of Star at that date. What portion of the retained earnings t D) Subsidiary is foreign. consolidated balance sheet prepared immediately after the business combin the noncontrolling interest? A) None B) 15 percent C) 100 percent D) Cannot be determined

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