When a Company Applies the Initial Value Method in Accounting $\begin{array} { ll } & \text { Retained earnings } \\& \text { Investment in subsidiary } \\\end{array}$

question 63

Multiple Choice

When a company applies the initial value method in accounting for its investment in a subsidiary and the subsidiary reports income less than dividends paid,what entry would be made for a consolidation worksheet?
A.
$\begin{array} { ll } & \text { Retained earnings } \\& \text { Investment in subsidiary } \\\end{array}$
B.
$\begin{array} { ll } & \text { Investment in subsidiary } \\ & \text { Retained earnings } \\\end{array}$
C.
$\begin{array} { ll } & \text { Investment in subsidiary } \\ & \text { Equity in subsidiary's income } \\\end{array}$
D.
$\begin{array} { ll } & \text { Equity in subsidiary's income } \\ & \text { Investment in subsidiary } \\\end{array}$
E.
$\begin{array} { ll } & \text { Retained earnings } \\& \text { Additional paid-in capital } \\\end{array}$

• A)A above
• B)B above
• C)C above
• D)D above
• E)E above

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