When Consolidating a Subsidiary That Was Acquired on a Date

Multiple Choice

When consolidating a subsidiary that was acquired on a date other than the first day of the fiscal year,which of the following statements is true in the presentation of consolidated financial statements?

A) Purchased pre-acquisition earnings are deducted from combined revenues and expenses
B) Purchased pre-acquisition earnings are added to combined revenues and expenses
C) Purchased pre-acquisition earnings are deducted from the beginning consolidated stockholders' equity
D) Purchased pre-acquisition earnings are added to the beginning consolidated stockholders' equity
E) Purchased pre-acquisition earnings are ignored on the consolidated income statement