During the Year Ended 30 June 20X7, a Parent Entity $\begin{array} { l l l l } \text { Rent revenue } & \mathrm { Dr } & 100,000 & \\\text { Rent expense } & \mathrm { Cr } & & 100,000\end{array}$

question 25

Multiple Choice

During the year ended 30 June 20X7, a parent entity rents a warehouse from a subsidiary entity for $100 000. The company tax rate is 30%. The consolidation adjustment entry needed at reporting date is:

• A) \(\begin{array} { l l l l }
• \text { Rent revenue } & \mathrm { Dr } & 100,000 & \\
• \text { Rent expense } & \mathrm { Cr } & & 100,000
• \end{array}\)
• B)\(\begin{array} { l l l l }
• \text { Rent revenue } & \mathrm { Dr } & 100,000 & \\
• \text { Rent expense } & \mathrm { Cr } & & 100,000 \\
• \text { Income tax expense } & \mathrm { Dr } & 30,000 & \\
• \text { Deferred tax liability } & \mathrm { Cr } & & 30,000
• \end{array}\)
• C) \(\begin{array} { l l l l }
• \text { Rent revenue } & \mathrm { Dr } & 100,000 & \\
• \text { Rent expense } & \mathrm { Cr } & 100,000 \\
• \text { Deferred tax asset } & \mathrm { Dr } & 30,000 & \\
• \text { Income tax expense } & \mathrm { Cr } & 30,000
• \end{array}\)
• D) \(\begin{array} { l l l l }
• \text { Rent expense } & \mathrm { Dr } & 100,000 & \\
• \text { Rent revenue } & \mathrm { Cr } & & 100,000
• \end{array}\)

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Definitions:

Responsibility

The state or fact of being accountable or to blame for something, implying the duty to deal with something or of having control over someone.

Workgroup

A collection of individuals who come together to achieve a common goal or task, often in a professional context.

Behavior-Focused Strategies

Approaches used in managing human behavior, especially in organizational settings, that aim to shape, guide, and reinforce desirable behaviors while discouraging undesirable ones.

Self-Awareness

Being aware of our own feelings, behaviors, personalities, likes, and dislikes.