If a Parent Company Uses the Equity Method of Accounting

Multiple Choice

If a parent company uses the equity method of accounting for a partially owned subsidiary and there are no intercompany profits (gains) or losses eliminated for the measurement of consolidated net income, consolidated retained earnings is equal to the balance of the parent company's:

A) Retained Earnings ledger account
B) Retained Earnings ledger account plus the balance of the subsidiary's Retained Earnings ledger account
C) Retained Earnings ledger account plus the parent's share of the balance of the subsidiary's Retained Earnings ledger account
D) Retained Earnings ledger account plus the parent's share of the net increase in the subsidiary's retained earnings subsequent to the date of the business combination