Mallard Ltd

question 22

Multiple Choice

Mallard Ltd. acquired 75% of the outstanding common shares of Teal Ltd. at December 31, 20X1, for $900,000. Mallard has recorded its investment using the cost method.
- In 2008, Teal paid out dividends of $100,000. In preparing Mallard's consolidated financial statements, what elimination is required for the dividends?

• A)Reduce dividends declared by $75,000; reduce dividend income by $75,000.
• B)Reduce dividends declared by $100,000; reduce dividend income by $100,000.
• C)Reduce dividends declared by $100,000; reduce dividend income by $75,000; reduce non-controlling interest by $25,000.
• D)Reduce dividend declared by $100,000; reduce dividend income by $75,000; increase non-controlling interest by $25,000.

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Definitions:

Fewer Misunderstandings

A reduction in the number of incorrect interpretations or confusions between communicating parties.

Establish Relationships

The process of creating connections or bonds with others, which can be based on emotions, professional ties, or mutual interests.

Men

Refers to adult human males.

Repetition

The action of repeating something that has already been said or written, often used as a method of learning or reinforcing knowledge.