Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. during the current year, a parent provides service

During the current year, a parent provides services costing it $100,000 to its wholly-owned subsidiary,...

70.2K

Verified Solution

Question

Accounting

During the current year, a parent provides services costing it $100,000 to its wholly-owned subsidiary, charging $140,000 for the services. At year-end, the subsidiary still owes the parent $5,000 for these services. How do these intercompany transactions affect the parent's equity in income for the year, assuming the parent uses the complete equity method to report its investment on its own books?

Select one:

A. $140,000 is added

B. $5,000 is added

C. $40,000 is deducted

D. No effect

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students