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A subsidiary provided services to its parent during the current year, at a cost of $120,000. The subsidiary charged the parent $200,000 for the services. On the year's consolidated income statement, what should be reported with respect to this information? Select one: a. Only service revenue, $200,000 b. Only service expense, $120,000 c. Service revenue $200,000 and service expense $120,000 d. Only service expense, $200,000

A subsidiary provided services to its parent during the current year, at a cost of $120,000. The subsidiary charged the parent $200,000 for the services. On the year's consolidated income statement, what should be reported with respect to this information? Select one: a. Only service revenue, $200,000 b. Only service expense, $120,000 c. Service revenue $200,000 and service expense $120,000 d. Only service expense, $200,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A subsidiary provided services to its parent during the current year, at a cost of $120,000. The subsidiary charged the parent $200,000 for the services. On the year's consolidated income statement, what should be reported with respect to this information? Select one: a. Only service revenue, $200,000 b. Only service expense, $120,000 c. Service revenue $200,000 and service expense $120,000 d. Only service expense, $200,000
Transcribed Image Text:A subsidiary provided services to its parent during the current year, at a cost of $120,000. The subsidiary charged the parent $200,000 for the services. On the year's consolidated income statement, what should be reported with respect to this information? Select one: a. Only service revenue, $200,000 b. Only service expense, $120,000 c. Service revenue $200,000 and service expense $120,000 d. Only service expense, $200,000
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