During the Year Ended 30 June 2017,a Parent Entity Rents

question 28

Multiple Choice

During the year ended 30 June 2017,a parent entity rents a warehouse from a subsidiary entity for $200 000.The company tax rate is 30%.Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction?

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Definitions:

Flip-over Provision

A defensive strategy in a company's charter to deter hostile takeovers, allowing shareholders to buy shares at a discount if a single buyer acquires a significant portion of the company.

Share Rights Plan

A defense strategy used by corporations to deter hostile takeovers, allowing existing shareholders the right to purchase additional shares at a discount.

Diversification

The strategy of spreading investments among various financial instruments or sectors to reduce risk.

Synergy

The concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.