At Acquisition Date, a Wholly Owned Subsidiary Had the Following $\quad$

At acquisition date, a wholly owned subsidiary had the following equity items. Retairled earmirgs $\quad$$\quad$$\$ 27,500$
BHare capital $\quad$$\quad$$\quad$$\$ 40,000$ In the year following the acquisition, the subsidiary transferred $5 000 from pre-acquisition retained earnings to a general reserve account. At the reporting date following the reserve transfer, which of the following consolidation adjustments is needed?
I. Dr Retained earnings $5 000
Cr General reserve $5 000
II. Dr General reserve $5 000
Cr Transfer to general reserve $5 000
III. Dr General reserve $5 000
Cr Shares in subsidiary $5 000
IV. Dr Shares in subsidiary $5 000
Cr Retained earnings $5 000

A) I.
B) II.
C) III.
D) IV.