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Included in Simmon’s financial
statements is a $100,000 note payable to King. What amount
of total liabilities should be reported in the consolidated
financial statements ?
a. $520,000
b. $550,000
c. $590,000
d. $650,000
All line items of assets and liabilities of subsidiary should be added item by item to those of parent company and the intercompany transaction should be eliminated in full therefore
the total liabilities in consolidated financial statements is $550,000 ( $450,000 + $200,000-$100,000)
C-590,000 $ Because we add only the percentage of the shares.
C. $590,000 total liability payable
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