Little Company Declared a Dividend of €90 000 for the Period

question 24

Multiple Choice

Little Company declared a dividend of €90 000 for the period ended 30 June 2014.Big Company owns 100% of the equity of Little Company.Big Company accrues dividends when they are declared by its subsidiaries.What elimination entry would be required to prepare the consolidated financial statements for the group for the period ended 30 June 2014?

• A) \[\begin{array} { | c | l | r | r | }
• \hline \mathrm { Dr } & \text { Cash } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend declared } & & 90000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Dividend receivable } & 90000 & \\
• \hline \mathrm { Cr } & \text { Cash } & & 90000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | l | r | r | }
• \hline \mathrm { Dr } & \text { Dividend payable } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend declared } & & 90000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Dividend income } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend receivable } & & 90000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | l | r | r | }
• \hline \mathrm { Dr } & \text { Dividend income } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend expense } & & 90000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Dividend payable } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend receivable } & & 90000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | l | r | r | }
• \hline \mathrm { Dr } & \text { Dividend declared } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend receivable } & & 90000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Dividend payable } & 90000 & \\
• \hline \mathrm { Cr } & \text { Dividend income } & & 90000 \\
• \hline
• \end{array}\]