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7 Cards in this Set

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Simple Equity Method
Original cost + Ownership interest x Reported income of subsidiary since acquisition
less : Ownership interest x reported losses of subsidiary since acquision
less: Ownership interest x Dividends declared by subsidiary since acquistion
Cost Method
invesment in subsidiary account is retained at its original cost of acquistion balance
No adjustment is made to account since income is earned by subsidiary only dividends as received
Sophisticated Equity Method
company's investment is adjusted for amortization of excess shown on determination and distribution schedule
Each years consolidation procedures begin as if there had never been a previous consolidation
Consolidation is performed independently each year since the worksheet eliminations of previous years are never recorded by the parent or subsidiary
The invesment and subsidiary equity must be at the same point in time
The investment account is adjusted through the end of the year and subsidiary retained earnings is still at is January 1 balance.
The excess after eliminating current year entries should always agree with the distribution and determination schedule
Amortization of Excess
All amortizations of excess are adjusted to the subsidiary's income.
The adjusted income is distributed to the controlling and noncontrolling
interest based on ownership %.
Each year's consolidation procedures begin as if the had never been a previous consolidation
refer to previous worksheets to save time