Wholly Owned Subsidiary Has the Following Balances at Control Date

question 21

True/False

Wholly owned Subsidiary has the following balances at control date 20X1:
$$\begin{array} { l l } \text { Capital } & \$ 500000 \\\text { Asset revaluation reserve } & \$ 200000 \\\text { Retained profits } & \$ 100000\end{array}$$
During 20X2 Subsidiary generates $100 000 profits and revalues plant downwards by $375 000.The 20X2 profit is before any impact of the downward asset revaluation.The asset revaluation reserve all relates to previous revaluation of plant.
During 20X3 Subsidiary incurs $50 000 of losses.
The amount of accumulated losses included in the consolidation for 20X3 (that is, not eliminated) is $125 000.

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