1. Giant owns 100% of the stock of Small Co. Giant company uses the equity method and recognizes $135,000 Equity income in Small for the year 2020. What journal entry would be required during consolidation to remove this account?

Multiple Choice

• Debit Investment in Small $135,000; Credit Equity income of Small $135,000.

• Debit Retained Earnings $135,000; Credit Equity Income of Small $135,000.

• Debit Depreciation Expense $135,000; Credit Investment in Small $135,000.

• Debit Equity income of Small $135,000; Credit Investment in Small $135,000.

2. Big Co. purchased 100% of the common stock of Little Co on 1/1/20. At the beginning of the year, Little Co had Retained Earnings of $500,000 and Common Stock of $200,000. As part of consolidation, what would be the journal entry to remove these accounts?

Multiple Choice

• Debit Investment in Little $700,000; Credit Retained Earnings $500,000; Common Stock $200,000.

• Debit Retained Earnings $500,000; Credit Equity income of Little $500,000.

• Debit Goodwill $700,000; Credit Retained Earnings $500,000; Common Stock $200,000.

• Debit Retained Earnings $500,000 and Common Stock $200,000; Credit Investment in Little Co. $700,000.

3. What does the acronym SAIDE stands for which specific consolidation entries when combing the financial statements of a parent and a subsidiary?