Coral Ltd Owns 100% of Ambrose Ltd B) C) D)

question 11

Multiple Choice

Coral Ltd. owns 100% of Ambrose Ltd. Coral uses the cost method to record this subsidiary. Coral received $150,000 in dividends from Ambrose. What journal entry should Coral make on its consolidation worksheet with respect to the dividends?

• A) \[\begin{array} { | c | c | }
• \hline \text { DR Dividends declared (Ambrose) } & 150,000 \\
• \hline \text { CR Dividend income (Coral) } & 150,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | }
• \hline \text { DR Dividends declared (Ambrose) } & 150,000 \\
• \hline \text { CR Investment in Ambrose (Coral) } & 150,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | }
• \hline \text { DR Dividend income (Coral) } & 150,000 \\
• \hline \text { CR Dividends declared (Ambrose) } & 150,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | c | }
• \hline \text { DR Investment in Ambrose (Coral) } & 150,000 \\
• \hline \text { CR Dividends declared (Ambrose) } & 150,000 \\
• \hline
• \end{array}\]

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Definitions:

Bearer Instrument

A document that entitles the person holding it to ownership or to receive the benefits it confers.

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The process of discussing an issue to reach an agreement or compromise between parties.

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