Under the Partial Equity Method, the Entry to Eliminate Subsidiary

question 9

Multiple Choice

Under the partial equity method, the entry to eliminate subsidiary income and dividends includes a debit to:

• A) Dividend Income.
• B) Dividends Declared - S Company.
• C) Equity in Subsidiary Income.
• D) Retained Earnings - S Company.

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Definitions:

Marginal Tax Rate

The rate at which the next dollar of taxable income will be taxed.

Total Income

The sum of all earnings received by an individual or entity, including wages, salaries, benefits, and income from investments.

Total Taxes

The cumulative amount of taxes levied by a government on an individual, corporation, or other entity in a specified period, including income, sales, and property taxes.

Marginal Tax Rates

The rate at which your income above a certain threshold is taxed, showing the tax imposed on the incremental dollar of income.