Taguchi Ltd $$\begin{array} { | c | c | } \hline \text { DR Dividend income } & 30,000 \\\hline \text { CR Dividends declared } & 80,000 \\\hline\end{array}$$

question 34

Multiple Choice

Taguchi Ltd. owns 80% of Shag Co. Shag declared and paid $100,000 in dividends. Taguchi uses the cost method to record its investment in Shag. In preparing Taguchi's consolidated financial statements, what elimination entry must be made with respect to the dividends?

• A) \[\begin{array} { | c | c | }
• \hline \text { DR Dividend income } & 30,000 \\
• \hline \text { CR Dividends declared } & 80,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline \text { DR Dividend income } & 30,000 \\
• \hline \text { DR Non-controlling interest } & 20,000 \\
• \hline \text { CR Dividends declared } & 100,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | }
• \hline \text { DR Non-controlling interest } & 20,000 \\
• \hline \text { CR Dividends declared } & 20,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | c | }
• \hline \text { DR Dividend income } & 100,000 \\
• \hline \text { CR Dividends declared } & 100,000 \\
• \hline
• \end{array}\]