Solution-How consolidated reporting using the previous data

How consolidated reporting using the previous data

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Reference no: EM132711655

Problem - The following items pertain to a parent company and its 60%-owned subsidiary at year end. There are no cross-guarantees of debt between the parent and subsidiary.

	Parent	Subsidiary
Current assets	$500,000	$1,000,000
Noncurrent assets (excluding subsidiary investment)	5,000,000	2,000,000
Current liabilities	750,000	250,000
Noncurrent liabilities	2,000,000	750,000
Revenues	1,700,000	1,500,000
Expenses	1,600,000	900,000
Dividends	100,000	600,000

Required - Explain and illustrate how consolidated reporting using the previous data can be misleading.

Reference no: EM132711655

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How consolidated reporting using the previous data

Reference no: EM132711655

Reference no: EM132711655

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