An Intra-Entity Transfer Took Place Whereby the Book Value Exceeded

question 115

Multiple Choice

An intra-entity transfer took place whereby the book value exceeded the transfer price of a depreciable asset. Which statement is true for the year after the year of transfer?

• A) A worksheet entry is made with a debit to retained earnings for an upstream transfer.
• B) A worksheet entry is made with a credit to retained earnings for an upstream transfer.
• C) A worksheet entry is made with a debit to retained earnings for a downstream transfer.
• D) A worksheet entry is made with a debit to investment in subsidiary for a downstream transfer.
• E) No worksheet entry is necessary.

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