When a Dividend Declared by a Subsidiary Results in an Adjustment

question 6

Multiple Choice

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

• A) Dr. Impairment loss Investment in Subsidiary Cr. Accumulated Impairment Loss
• B) Dr. Accumulated 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:

Cash Disbursements

Payments made by a business in the form of cash or cash equivalents.

December

The last month of the year according to the Gregorian calendar, which is the twelfth one.

Merchandise

Goods that are purchased in finished form for the purpose of resale without further processing.

Cash Balance

The total amount of cash in a company's accounts at any given time.