During the Year Ended 30 June 20X7, a Parent Entity

question 27

Multiple Choice

During the year ended 30 June 20X7, a parent entity rents a warehouse from a subsidiary entity for $100 000. The company tax rate is 30%. The consolidation adjustment entry needed at reporting date is:

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or credit, which the lender can seize if the borrower fails to repay the agreed amount.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Net Worth

The value of all assets a person or corporation owns, minus the liabilities they owe; a measure of financial health.

Liabilities

A debt owed by a business to another organization or individual.