When a Parent Uses the Initial Value Method Throughout the Year

Multiple Choice

When a parent uses the initial value method throughout the year to account for investment in a subsidiary,which of the following statements is true before making adjustments on the consolidated worksheet?

A) Parent company net income equals consolidated net income
B) Parent company retained earnings equals consolidated retained earnings
C) Parent company total assets equals consolidated total assets
D) Parent company dividends equals consolidated dividends
E) Goodwill is never recognized