Company Y purchases a controlling interest in Company Z on January 1, 2012. Which of the following would appear as the Shareholders' Equity amount on Company Y's Consolidated Balance Sheet on the date of acquisition?
A) Company Y's Shareholders' Equity.
B) The sum of the Shareholders' Equity of both companies.
C) Company Y's Shareholders' Equity as well as Company Y's proportional share of company Z's net assets at book value.
D) Company Y's Shareholders' Equity as well as Company Y's proportional share of company Z's net assets at Fair Market Value.

Question

Quizplus · Accepted Answer

Company Y's Shareholders' Equity would appear on the consolidated balance sheet. The acquisition would also include the fair value of Company Z's net assets, but this is not part of the shareholders' equity section.

Company Y Purchases a Controlling Interest in Company Z on January