Kayla Ltd Owns 100% of Milos Ltd

question 18

Multiple Choice

Kayla Ltd. owns 100% of Milos Ltd. Kayla records its investment at cost. Kayla received $300,000 in dividends from Milos. What adjustment should Kayla make on its consolidated financial statements with respect to the dividends?

• A)Decrease Dividend income (Kayla): $300,000
• Decrease Dividends declared (Milos): $300,000
• B)Increase Dividend income (Kayla): $300,000
• Increase Dividends declared (Milos): $300,000
• C)Decrease Dividends declared (Milos): $300,000
• Decrease Investment in Milos (Kayla): $300,000
• D)Increase Dividends declared (Milos): $300,000
• Increase Investment in Milos (Kayla): $300,000

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Definitions:

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