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Question: the process of aggregating individual sets of financial statements to...

Question details

The process of aggregating individual sets of financial statements to produce consolidated financial statements requires:

Select one:
a.

that no adjustments be entered into the individual ledger accounts of entities in the group

b.

balance sheet date adjusting journal entries to be recorded in the ledger accounts of the subsidiaries

c.

accruals of expenses and revenue entered directly into the retained earnings ledger account of the parent entity

d.

balance sheet date adjusting entries entered directly into the ledger accounts of the parent entity only

 

 

 

Baker Ltd sold an item of machinery to its subsidiary Lanny Ltd for $8000. The original cost of the machinery was $12000 and the carrying amount of the machinery in the books of Baker Ltd at the time of sale was $10000. The consolidation journal entry at the end of the financial year is:


 

a.

 

Dr Profit on sale                          $4000 

    Cr  Machinery                                           $2000

    Cr Accumulated depreciation                  $2000


 

b.

 

Dr Machinery                               $6000

      Cr Loss on sale                                       $2000

      Cr Accumulated depreciation                $2000


 

c.

Dr Machinery                              $4000 

      Cr Loss on sale                                        $2000

      Cr Accumulated depreciation                 $2000

d.

Dr Machinery                              $4000 

      Cr Profit on sale                                      $2000

      Cr Accumulated depreciation                $2000

 

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