At the Date of Acquisition, a Subsidiary Had Recorded a Dividend

question 14

Multiple Choice

At the date of acquisition, a subsidiary had recorded a dividend payable of $100 000. Assuming that the shares were acquired on a cum. div basis, the consolidation adjustment needed at the date of acquisition to eliminate the dividend is:

• A) DR Dividend payable $100 000 CR Dividend receivable $100 000
• B) DR Dividend revenue $100 000 CR Dividend declared $100 000
• C) DR Shares in subsidiary $100 000 CR Dividend receivable $100 000
• D) DR Dividend receivable $100 000 CR Dividend payable $100 000

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Definitions:

Melanin

A pigment found in the skin, hair, and eyes that gives them color and offers protection against ultraviolet radiation.

Arrector Pili

Small muscles attached to hair follicles in mammals, contraction of which causes the hair to stand upright, producing goosebumps.

Hair Follicle

The skin organ that produces hair, consisting of a shaft, root, and bulb, and is connected to sebaceous glands.

Sebaceous Gland

Gland of the skin, usually associated with a hair follicle, that produces sebum.