A wholly-owned subsidiary provides services to its parent during the year. Cost of services provided is $400,000. The subsidiary charged the parent $600,000 for the services. Which statement is false concerning eliminating entry (I) related to these intercompany services?
A) Eliminating entry (I) removes the subsidiary's service expense of $400,000.
B) Eliminating entry (I) removes the subsidiary's service revenue of $600,000.
C) Eliminating entry (I) removes the parent's service expense of $600,000.
D) Eliminating entry (I) has no effect on consolidated income.
Correct Answer:
Verified
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