Kanga Limited acquired a 35% investment in Roo Limited for $20 000. Kanga Limited also owns two subsidiaries and prepares consolidated financial statements. Roo Limited declared and paid a dividend of $5000 during the current financial year. The appropriate consolidation adjustment to record this transaction will include which of the following?

Question

Quizplus · Accepted Answer

The appropriate consolidation adjustment to record the dividend received from an associate is to debit the cash account and credit the dividend revenue account in the consolidated financial statements. Therefore, the correct choice is C, which is to debit the dividend revenue account. The other choices are not relevant in this transaction.

Kanga Limited Acquired a 35% Investment in Roo Limited for $20