c). Why is it necessary to distinguish pre-acquisition dividends from post-acquisition dividends? [1 mark]
d). If, at acquisition date, the subsidiary has recorded goodwill in its records, how does this affect the preparation of the pre-acquisition entries? [2 mark]
e). If, at the date the parent acquires a controlling interest in a subsidiary, the carrying amounts of the subsidiary’s assets are not equal to fair value, explain why adjustments to these assets are required in the preparation of the consolidated financial statements.
Please prepare the above answers in your own words to demonstrate that you know how to explain consolidation entries.
The remainder of the marks will be assessed based on:
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