During the year ended 30 June 2021, a parent entity rents a warehouse from a subsidiary entity for $200 000. The company tax rate is 30%. Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction? a.Rent revenueDr200 000 Rent expenseCr 200 000 b.Rent revenueDr200 000 Rent expenseCr 200 000 Income tax expenseDr60 000 Deferred tax liabilityCr 60 000 c.Rent revenueDr200 000 Rent expenseCr 200 000 Deferred tax assetDr60 000 Income tax expenseCr 60 000 d.Rent expenseDr200 000 Rent revenueCr 200 000 Answer (write your correct choice):

Eliminating entries adjust the totals of the individual account balances of the separate…

Answered: During the year ended 30 June 2021, a…

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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During the year ended 30 June 2021, a parent entity rents a warehouse from a subsidiary entity for $200 000. The company tax rate is 30%. Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction?

a.	Rent revenue	Dr	200 000
	Rent expense	Cr		200 000

b.	Rent revenue	Dr	200 000
	Rent expense	Cr		200 000
	Income tax expense	Dr	60 000
	Deferred tax liability	Cr		60 000

c.	Rent revenue	Dr	200 000
	Rent expense	Cr		200 000
	Deferred tax asset	Dr	60 000
	Income tax expense	Cr		60 000

d.	Rent expense	Dr	200 000
	Rent revenue	Cr		200 000

Answer (write your correct choice):

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