The Following Consolidation Adjusting Journal Entries Appeared at the End

question 37

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. 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 for the entire current period.
• E) the share of profits derived by the subsidiary in the current period, up to the time of divestment.

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Definitions:

Price Per Unit

The cost assigned to a single unit of a product or service, indicating how much a consumer will pay for one unit.

Payable

Amounts owed by a company to its creditors or suppliers that are due to be paid within the near future.

Inventory On Credit

A business practice where goods are acquired without immediate payment, with the understanding that payment will be made at a later date.

Receivables Balance

The total amount of money owed to a company for goods or services delivered or used but not yet paid for by customers.