Use the Following Information to Answer Questions
on 1 $\begin{array} { l l } \text { Share Capital } & \$ 35,000 \\\text { Retained Earnings } & \$ 15,000\end{array}$

Multiple Choice

Use the following information to answer questions
On 1 July 2008, P Limited acquired all the issued shares of S Limited for $50 000 when the equity of S Limited consisted of:
$\begin{array} { l l } \text { Share Capital } & \$ 35,000 \\\text { Retained Earnings } & \$ 15,000\end{array}$
During the year ended 30 June 2009, S Limited paid an interim dividend of $5 000 from profits earned before 1 July 2008.
-The pre-acquisition elimination entry at 1 July 2008 is:

A) $\begin{array} { l l l l } \text { Shares in S Limited } & \mathrm { Dr } & 50000 & \\\text { Opening Retained earnings } & \mathrm { Cr } & & 15000 \\\text { Share capital } & \mathrm { Cr } & & 35000\end{array}$
B) $\begin{array} { l l l l } \text { Opening Retained earnings } & \mathrm { Dr } & 15000 & \\\text { Share capital } & \mathrm { Dr } & 35000 & \\\text { Shares in S Limited } & \mathrm { Cr } & & 50000\end{array}$
C) $\begin{array} { l l l l } \text { Opening Retained earnings } & \mathrm { Dr } & 10000 & \\\text { Share capital } & \mathrm { Dr } & 35000 & \\\text { Shares in S Limited } & \mathrm { Cr } & & 45000\end{array}$
D) $\begin{array} { l l l l } \text { Opening Retained earnings } & \mathrm { Dr } & 15,000 & \\\text { Share capital } & \mathrm { Dr } & 35,000 & \\\text { Dividend paid } & \mathrm { Cr } & 5,000 \\\text { Shares in S Limited } & \mathrm { Cr } & 45,000\end{array}$