When a Company Applies the Initial Method in Accounting for Its

question 60

Multiple Choice

When a company applies the initial method in accounting for its investment in a subsidiary and the subsidiary reports income in excess of dividends paid, what entry would be made for a consolidation worksheet?
A. Retained earnings
Investment in subsidiary

B. Investment in subsidiary
Retained earnings

C. Investment in subsidiary
Equity in subsidiary's income

D. Equity in subsidiary's income
Investment in subsidiary

E. Additional paid-in capital
Retained earnings

• A)A above
• B)B above
• C)C above
• D)D above
• E)E above