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One company purchases 90% of the common stock of another company for $813,000. At what amount will the investment in subsidiary be shown in a consolidated balance sheet prepared immediately after the stock acquisition? $0 5731.700 $813.000 $813.000 plus the amount of the differential none of the above 3 pts Question 8 A 70%-owned subsidiary declares and pays a cash dividend. What effect does the dividend have on the retained earnings and non-controlling interest (NCI) balances in the parent company's consolidated balance sheet? (CPA adapted) No effect on retained earnings and a decrease in NCI. No effect on either retained earnings or NCI Decreases in both retained earnings and NCI O A decrease in retained earnings and no effect on NCI U Question 22 If a parent loses control of a subsidiary and no longer holds an equity interest in its former sub: The parent should recognize a GAIN OR LOSS immediately This would not affect the income Statement because the parent should adjust retained earnings in the current period for any gain or loss The parent does not recognize a GAIN or LOSS until the parent corporation makes a final determination as to whether they may purchase more of the former subsidiaries stock in the future The parent should recognize a GAIN OF LOSS lenmediately except when the parent is still a creditor of the former subsidiary Patents 3 pts Question 20 How do the consolidation entries differ in a bargain purchase scenario from an acquisition at an amount greater than book value? The consolidation entries do not change in a bargain purchase scenario, The differential is ignored in a bargain purchase scenario. The parent company multiplies all numbers by - 1 The consolidation entry to reclassify expenses related to the differential increases reported expenses rather than decreases them. None of the other choices is correct. 3 pts

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