The Following Consolidation Adjusting Journal Entries Appeared at the End

question 15

Multiple Choice

The following consolidation adjusting journal entries appeared at the end of a period in which the parent sold all of its shareholding in a subsidiary.It received $1 200 000 for the shares. $$\begin{array} { | l | l | r | r | } \hline \mathrm { Dr } & \text { Profit on sale of investment } & 500000 & \\\hline \mathrm { Dr } & \text { Loss on sales of subsidiary } & 250000 & \\\hline \mathrm { Cr } & \text { Profit after tax } & & 179000 \\\hline \mathrm { Cr } & \text { Retained earnings } & & 271000 \\\hline \mathrm { Cr } & \text { Revaluation reserve } & & 300000 \\\hline\end{array}$$ The 'Cr-Profit after tax' entry above represents:

• A) the profit made by the parent on the sale of the shares.
• B) the profit made by the economic entity on the sale of the shares.
• C) the amount accruing to the minority interest of the subsidiary.
• D) the share of profits derived by the subsidiary in the current period, up to the time of divestment.

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