Assuming Rhine Generates Cash Flow from Operations of $27,200 in 2017

question 98

Multiple Choice

Assuming Rhine generates cash flow from operations of $27,200 in 2017, how will Harrison record the $16,500 payment of cash on April 15, 2018 in satisfaction of its contingent obligation?

• A) Debit Contingent performance obligation $16,500, and Credit Cash $16,500.
• B) Debit Contingent performance obligation $3,142, debit Loss from revaluation of contingent performance obligation $13,358, and Credit Cash $16,500.
• C) Debit Investment in Subsidiary and Credit Cash, $16,500.
• D) Debit Goodwill and Credit Cash, $16,500.
• E) No entry.

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Definitions:

Central Banks

National institutions tasked with overseeing a country's currency, money supply, and interest rates, and supervising its banking system.

Developing Countries

Nations with relatively lower levels of industrialization, lower standards of living, and often a lower Human Development Index (HDI) compared to developed countries.

Direct Cash Transfers

A form of financial aid where money is given directly to individuals, typically by the government, without any intermediary goods or services.

Conditional Cash

Money awarded or transferred under specific conditions or requirements, often used in social programs to encourage positive behaviors.