For Each of the Following Situations (1 - 10), Select

question 96

Essay

For each of the following situations (1 - 10), select the correct entry (A - E) that would be required on a consolidation worksheet.
(A.) Debit retained earnings.
(B.) Credit retained earnings.
(C.) Debit investment in subsidiary.
(D.) Credit investment in subsidiary.
(E.) None of the above.
___ 1. Upstream beginning inventory profit, using the initial value method.
___ 2. Downstream beginning inventory profit, using the initial value method.
___ 3. Upstream ending inventory profit, using the initial value method.
___ 4. Downstream ending inventory profit, using the initial value method.
___ 5. Upstream transfer of depreciable assets, in the period after transfer, where subsidiary recognizes a gain, using the initial value method.
___ 6. Downstream transfer of depreciable assets, in the period after transfer, where parent recognizes a gain, using the initial value method.
___ 7. Upstream transfer of land, in the period after transfer, where subsidiary recognizes a loss, using the initial value method.
___ 8. Downstream transfer of land, in the period after transfer, where parent recognizes a loss, using the initial value method.
___ 9. Eliminate income from subsidiary, recorded under the equity method.
___ 10. Eliminate recorded amortization of acquisition fair value over book value, recorded under the equity method.

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