TLC Homecare Ltd

question 21

Multiple Choice

TLC Homecare Ltd. owns 100% of Errand Service for Seniors Ltd. (ESS) . On January 2, 20X1, TLC bought 12 identical cars for $300,000. It promptly sold four of the cars to ESS for $112,000. ESS will amortize the cars over five years using the straight-line method. At December 31, 20X2, what is the net adjustment that should be made to accumulated depreciation in TLC's consolidated financial statements? Ignore income taxes.

• A)$0
• B)Reduction of $2,400
• C)Reduction of $4,800
• D)Reduction of $5,600

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Definitions:

Nonfood Products

Items that are not intended for consumption as food, ranging from household goods to personal care items.

Acronym

An abbreviation formed from the initial letters of other words and pronounced as a word.

First Letters

Refers to the initial characters in a sequence of words or a piece of text, often considered in psychological tests or literature analysis.

Nonsense Syllable

A string of letters that does not form a meaningful word, often used in memory and learning experiments.