A Co. has acquired an 80% controlling interest in B Co. If using the proportionate consolidation method, the consolidated balance sheet on the date of acquisition, will contain:

A) the parent's pro rata share of the assets and liabilities of the subsidiary at book value.
B) 100% of the assets and liabilities of the subsidiary at fair market value.
C) 100% of the assets and liabilities of the subsidiary at book value.
D) the parent's pro rata share of the assets and liabilities of the subsidiary at fair market value.

Proportionate Consolidation Method

An accounting method where an investing entity records its share of the assets, liabilities, income, and expenses of an associate or joint venture.

Assets and Liabilities

Assets are resources owned by a company expected to provide future benefits, and liabilities are obligations a company owes to outside parties.

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, not under compulsion and both having reasonable knowledge of the relevant facts.