Pennant Corp. owns 70% of the common stock of Scarvens Co. Scarvens's revenues for 2020 totaled $200,000.Required: What amount of Scarvens' revenues would be included in the consolidated revenues under the acquisition method of accounting for business combinations?

The entire amount of the subsidiary's revenues is combined with the parent's revenues to arrive at consolidated revenues. The exception to this would be the case of a midyear acquisition. If Pennant owned its shares of Scarvens for all of 2020, all of Scarvens's revenues ($200,000) would be combined. If Pennant owned its shares of Scarvens for only a portion of 2020, any of Scarvens's revenues earned prior to the acquisition would be excluded from consolidated revenues.