Singh Ltd Is a Wholly Owned Subsidiary of Ross Co $$\begin{array} { | c | c | } \hline \text { DR Retained earnings } & 37,500 \\\hline \text { CR Machine } & 87,500 \\\hline\end{array}$$

question 37

Multiple Choice

Singh Ltd. is a wholly owned subsidiary of Ross Co. At the beginning of 20X4, Ross acquired a machine for $350,000 and sold it to Singh for $437,500. The machine will be depreciated over five years using the straight-line method with no residual value.
-Seven years after Singh bought the machine from Ross, the machine is still in use. In preparing its consolidated financial statements, what entry should Ross make?

• A) \[\begin{array} { | c | c | }
• \hline \text { DR Retained earnings } & 37,500 \\
• \hline \text { CR Machine } & 87,500 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | }
• \hline \text { DR Accumulated depreciation-machine } & 37,500 \\
• \hline \text { CR Machine } & 87,500 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l| c | }
• \hline \text { DR Retained earnings } & 37,500 \\
• \hline \text { CR Accumulated depreciation } & 87,500 \\
• \hline
• \end{array}\]
• D)No entry is required at this time.

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