Jersey Company acquired 90% of York Company on April 1, 2014. Both Jersey Company and York Company have December 31 fiscal year ends. Under current GAAP, which of the following statements is false?
A. The consolidated income statement in 2014 should not include Yorks revenues and expenses prior to April 1, 2014.
B. When preparing consolidating work papers in 2014, Yorks revenues prior to April 1, 2014 are eliminated.
C. Yorks earnings prior to April 1, 2014 should appear as a deduction on the consolidated income statement in 2014.
D. The consolidated income statement in 2014 should include Yorks revenues and expenses after April 1, 2014.
Answer:C
Jersey Company acquired 90% of York Company on April 1, 2014. Both Jersey Company and York Company have December 31 fiscal year ends. Under current GAAP, which of the following statements is false?
A. The consolidated income statement in 2014 should not include Yorks revenues and expenses prior to April 1, 2014. B. When preparing consolidating work papers in 2014, Yorks revenues prior to April 1, 2014 are eliminated. C. Yorks earnings prior to April 1, 2014 should appear as a deduction on the consolidated income statement in 2014. D. The consolidated income statement in 2014 should include Yorks revenues and expenses after April 1, 2014.