Multiple Choice
Stiller Company, an 80% owned subsidiary of Leo Company, purchased land from Leo on March 1, 2020, for $75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2020 and 2021, respectively. Leo uses the equity method to account for its investment.On a consolidation worksheet, having used the equity method, what adjustment would be made for 2021 regarding the land transfer?
A) Debit retained earnings for $15,000.
B) Credit retained earnings for $15,000.
C) Debit retained earnings for $50,000.
D) Credit retained earnings for $50,000.
E) Debit investment in Stiller for $15,000.
Correct Answer:
Verified
Correct Answer:
Verified
Q65: Poole Co. acquired 100% of Mullen Inc.
Q66: Anderson Company, a 90% owned subsidiary of
Q67: Anderson Company, a 90% owned subsidiary of
Q68: Stark Company, a 90% owned subsidiary of
Q69: Wilson owned equipment with an estimated life
Q71: Pepe, Incorporated acquired 60% of Devin Company
Q72: On January 1, 2021, Musical Corp. sold
Q73: On January 1, 2021, Pride, Inc. acquired
Q74: Milton Co. owned all of the voting
Q75: McGraw Corp. owned all of the voting