Company S Is a 100%-Owned Subsidiary of Company P

question 49

Multiple Choice

Company S is a 100%-owned subsidiary of Company P. On January 1, 20X9, Company S has $100,000 of 8% face rate bonds outstanding. The bonds had 5 years to maturity on January 1, 20X9, and had an unamortized discount of $5,000. On that date, Company P purchased the bonds for $99,000. The net adjustment needed to consolidate retained earnings on December 31, 20X9 is ____.

• A) $(4,000)
• B) $(3,200)
• C) $(800)
• D) $0

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Definitions:

Civil Rights Movement

A social and political movement in the United States aimed at ending racial segregation and discrimination against African Americans.

CIA

The Central Intelligence Agency, a non-military overseas intelligence service of the United States federal government, is charged with collecting, processing, and analyzing information related to national security.

Iran

A country in the Middle East, known for its rich cultural heritage, history, and significant influence in regional politics.

British-Owned Oil Fields

Oil extraction sites owned by British companies, often located outside of the United Kingdom, that contribute to the global oil supply and economy.