For Each of the Following Situations (1 - 10), Select

Essay

For each of the following situations (1 - 10), select the correct entry (A -
E) that would be required on a consolidation worksheet.
(A) Debit retained earnings.
(B) Credit retained earnings.
(C) Debit investment in subsidiary.
(D) Credit investment in subsidiary.
(E) None of these answer choices are correct.
___ 1. Upstream beginning intra-entity gross profit on inventory, using the initial value method of accounting.
___ 2. Downstream beginning intra-entity gross profit on inventory, using the initial value method of accounting.
___ 3. Upstream ending intra-entity gross profit on inventory, using the initial value method of accounting.
___ 4. Downstream ending intra-entity gross profit on inventory, using the initial value method of accounting.
___ 5. Upstream transfer of depreciable assets, in the period after transfer, where subsidiary recognizes a gain, using the initial value method of accounting.
___ 6. Downstream transfer of depreciable assets, in the period after transfer, where parent recognizes a gain, using the initial value method of accounting.
___ 7. Upstream transfer of land, in the period after transfer, where subsidiary recognizes a loss, using the initial value method of accounting.
___ 8. Downstream transfer of land, in the period after transfer, where parent recognizes a loss, using the initial value method of accounting.
___ 9. Eliminate income from subsidiary, recorded under the equity method of accounting.
___ 10. Eliminate recorded amortization of acquisition-date fair value over book value, recorded under the equity method of accounting.