Under the Parent Company Theory, Which of the Following Statements

Multiple Choice

Under the Parent Company Theory, which of the following statements pertaining to consolidated financial statements is TRUE?

A) The consolidated balance sheet is prepared by adding the carrying amounts of both the Parent and its subsidiary.
B) The consolidated balance sheet is prepared by adding the carrying amounts of both the Parent and its subsidiary as well as the Parent's share of any acquisition differentials.
C) The consolidated balance sheet is prepared by adding the fair market values of both the Parent and its subsidiary as well as the parent's share of any acquisition differentials.
D) The consolidated balance sheet is prepared by adding together the fair market values of both the parent and its subsidiary.