For WizardKim-DP

Wk4 Initial Discussion Post 1

When a parent company uses the equity method to account for an investment in a subsidiary, why do both the parent’s Net Income and Retained Earnings account balances agree with the consolidated totals?

Explain how this accounting is achieved in the parent's financial statements.

Instructions:

All posts (both initial and responses) must be substantial and each of your initial posts must be supported by 3 peer reviewed authoritative sources, not including the textbook, cited properly in APA format. Responses should have proper support as applicable.

3 substantial paragraphs.