During 20X3, a Parent Company Billed Its 100%-Owned Subsidiary for Computer

question 38

Multiple Choice

During 20X3, a parent company billed its 100%-owned subsidiary for computer services at the rate of $1,000 per month. At year end, one month's bill remained unpaid. As a part of the consolidation process, net income

• A)should be reduced $12,000.
• B)should be reduced $1,000.
• C)needs no adjustment.
• D)needs an adjustment, but the amount is not provided by this information.