Question
A wholly-owned subsidiary provides services to its parent during the year. Cost of services provided is $400,000. The subsidiary charged the parent $600,000 for the
A wholly-owned subsidiary provides services to its parent during the year. Cost of services provided is $400,000. The subsidiary charged the parent $600,000 for the services. Which statement is false concerning eliminating entry (I) related to these intercompany services?
| A. | Eliminating entry (I) has no effect on consolidated income. | |
| B. | Eliminating entry (I) removes the subsidiary's service revenue of $600,000. | |
| C. | Eliminating entry (I) removes the parent's service expense of $600,000. | |
| D. | Eliminating entry (I) removes the subsidiary's service expense of $400,000. |
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Financial Accounting A Critical Approach
Authors: John Friedlan
3rd Edition
0070967601, 978-0070967601
