Consolidated Financial Statements Are Being Prepared for Behemoth Corporation and Its

question 3

Multiple Choice

Consolidated financial statements are being prepared for Behemoth Corporation and its two wholly-owned subsidiaries that have intercompany loans of $50,000 and intercompany profits of $100,000.How much of these intercompany loans and profits should be eliminated?

• A)intercompany loans − $0;intercompany profits − $0
• B)intercompany loans − $50,000;intercompany profits − $0
• C)intercompany loans − $50,000;intercompany profits − $100,000
• D)intercompany loans − $0;intercompany profits − $100,000

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