When a Dividend Declared by a Subsidiary Results in an Adjustment

question 4

Multiple Choice

When a dividend declared by a subsidiary results in an adjustment for impairment of the parent company investment in subsidiary asset,the following consolidation worksheet adjustment is required:

• A) DR Impairment loss Investment in Subsidiary CR Accum. Impairment Loss
• B) DR Accum Impairment Loss CR Impairment Loss Investment in Subsidiary
• C) DR Impairment Loss Investment in Subsidiary CR Investment in Subsidiary
• D) none of the above

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Definitions:

Amortized

The process of spreading out a loan or intangible asset cost over a fixed period in regular installments, covering interest and principal payments.

Salvage Value

The anticipated market value of an asset at the conclusion of its operational lifespan.

Asset's Value

The monetary worth assigned to an asset, based on factors like market value, cost, and depreciation.

Benefit Period

The duration during which benefits, such as those from an insurance policy or investment, are paid out.