The Following Consolidation Adjusting Journal Entries Appeared at the End

question 23

Multiple Choice

The following consolidation adjusting journal entries appeared at the end of a period in which the parent sold all of its shareholding in a subsidiary. It received $1,200,000 for the shares.

The amount of the share of post-acquisition profits and movements in equity balances, contributed to the group by the subsidiary, and attributable to the parent, is:

• A) ($250,000).
• B) $350,000.
• C) $750,000.
• D) $1,200,000.
• E) Cannot be determined from the information given.

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Definitions:

Work in Process

Goods that are under production but not yet finalized.

Raw Materials Transactions

Financial exchanges involved in purchasing the basic substances used in production processes.

Manufacturing Overhead

All indirect costs associated with manufacturing, including utilities, rent for the manufacturing facilities, and salaries of non-direct employees.

Raw Materials Transactions

Financial and operational activities related to the acquisition and use of raw materials in the production process.