Question
At acquisition date, a wholly owned subsidiary had the following equity items. Retained earnings $28 000 Share capital $60000 In the year following the acquisition,
At acquisition date, a wholly owned subsidiary had the following equity items.
Retained earnings
$28 000
Share capital
$60000
In the year following the acquisition, the subsidiary transferred $20000 from pre-acquisition retained earnings to a general reserve account. At the reporting date following the reserve transfer, which of the following consolidation adjustments is needed?
i. DrRetained earnings$20000
CrGeneral reserve$20000
ii. DrGeneral reserve$20000
CrShares insubsidiary$20000
iii. DrShares in subsidiary$20000
CrRetainedearnings$20000
iv. DrGeneral reserve$20000
CrTransfer to general reserve$20000
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