There Are Alternative Ways to Calculate Consolidated Retained Earnings

question 1

Multiple Choice

There are alternative ways to calculate consolidated retained earnings. One of the methods requires adjustments to be made to the parent company's separate-entity ending retained earnings balance as of the consolidation date. What adjustments must be made to determine ending consolidated retained earnings?

• A)Add in the dividends from the subsidiary to the parent and the parent's share of the subsidiary's adjusted income.
• B)Subtract the dividends from the subsidiary to the parent and the parent's share of the subsidiary's adjusted income.
• C)Add in the dividends from the subsidiary to the parent and subtract the parent's share of the subsidiary's adjusted income.
• D)Subtract the dividends from the subsidiary to the parent and add in the parent's share of the subsidiary's adjusted income.

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