Parent Limited Acquired 100% of a Subsidiary on 1 July

question 8

Multiple Choice

Parent Limited acquired 100% of a subsidiary on 1 July 20X7.At acquisition date the subsidiary had the following equity items:
-Retained earnings $24 000
-Share capital $33 000
-Business combination revaluation reserve $10 000
In the year following the acquisition the subsidiary paid a bonus dividend of $14 000 out of pre-acquisition retained earnings.The following consolidation adjustment is needed in the consolidation worksheet for 30 June 20X8:

• A)DR Share capital $14 000 CR Bonus dividend paid $14 000
• B)DR Shares in subsidiary 14 000 CR Share capital $14 000
• C)DR Bonus dividend paid $14 000 CR Retained earnings $14 000
• D)DR Retained earnings $14 000 CR Share capital $14 000.

---

Definitions:

Ultimate Goal

The primary aim or final objective intended to be achieved in any given endeavor or system.

Consequentialists

Ethical theory that judges an action's morality based on its outcomes or consequences.

Criticized Aspect

A feature or part of something that is singled out as problematic and subject to judgment or disapproval.

Doctrine

A set of beliefs or teachings that are held and promoted by a religious, political, social, or other group.