Asked by
Marina Misitano
on Dec 10, 2024
Verified
LaFevor Co. acquired 70% of the common stock of Dean Corp. on August 1, 2022. For 2022, Dean reported revenues of $960,000 and expenses of $780,000, all reflected evenly throughout the year. The annual amount of amortization related to this acquisition was $21,000.In consolidation, the total amount of expenses related to Dean, and to LaFevor's acquisition of Dean, for 2022 is determined to be
A) $180,000.
B) $234,000.
C) $325,000.
D) $333,750.
E) $546,000.
Consolidation
The process of combining the financial statements of a parent company with those of its subsidiaries to present as if the group of companies was a single economic entity.
Amortization
The gradual reduction of a debt or the cost of an intangible asset over a specified period of time.
Acquisition
The method where one corporation acquires the majority or entirety of another corporation's shares to obtain dominance over that corporation.
- Calculate and interpret the consolidation entries related to the acquisition of a subsidiary.
Verified Answer
KS
Learning Objectives
- Calculate and interpret the consolidation entries related to the acquisition of a subsidiary.