Quick Company Owns All of the Outstanding Shares of Peanut

Multiple Choice

Quick Company owns all of the outstanding shares of Peanut Ltd. During the year, Peanut Ltd. declared and paid a dividend of $10,000. The tax rate is 30% for both entities. In preparation for the year-end consolidated financial statements, what are the consolidated financial statement adjustments required?

A) Decrease Dividend Revenue: $10,000, decrease Dividend Declared and Paid: $10,000, decrease Income Tax Expense: $3,000, and decrease Income Tax Payable: $3,000.
B) Increase Dividend Revenue: $10,000, increase Dividend Declared and Paid: $10,000, increase Income Tax Expense: $3,000, and increase Income Tax Payable: $3,000.
C) Decrease Dividend Revenue: $10,000, decrease Dividend Declared and Paid: $10,000.
D) Increase Dividend Revenue: $10,000, increase Dividend Declared and Paid: $10,000.