As Part of the Consolidation Process for a Partially-Held Foreign

question 65

Multiple Choice

As part of the consolidation process for a partially-held foreign subsidiary, the elimination entry to distribute the excess of cost over book value will include a credit to Cumulative Translation Adjustment-Parent

• A)​for the amount of excess attributable to identifiable net assets multiplied by the difference between historical and current exchange rates
• B)​for the amount of excess attributable to identifiable net assets multiplied by the difference between average and current exchange rates
• C)​for the Parent's portion of the excess attributable to identifiable net assets multiplied by the difference between historical and current exchange rates
• D)​for the Parent's portion of the excess attributable to identifiable net assets multiplied by the difference between average and current exchange rates

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Definitions:

Managers

Individuals responsible for planning, organizing, leading, and controlling resources to achieve organizational goals.

Parent Company

A corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Profit Centers

Divisions or departments within a business that are treated as separate entities for the purpose of financial reporting, with their own revenues and expenses.

Sales

Transactions between a seller and a buyer where goods or services are exchanged for money.