The net income of the subsidiary account appear

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1 -- On consolidated financial statements, where does the parent's equity in the net income of the subsidiary account appear?
A - On the consolidated income statement, as a deduction from income.
B - On the consolidated income statement, as a revenue.
C - On the consolidated balance sheet, as an equity.
D - Doesn't appear on the consolidated financial statements.

2 -- A parent acquired all of the stock of a subsidiary. The subsidiary had originally issued long-term debt when the market rate of interest was 5%. The market rate if interest for the debt at the date of acquisition is 3%. How does the change in market interest rates affect the consolidated financial statements?
A - Goodwill is lower
B - Acquired long-term debt is valued at a lower amount
C - Future interest expense is lower
D - There is no effect on the consolidated account balances.

Reference no: EM13304270

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